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Migrant worker exploitation leads to $53k in penalties

10 August 2016

Wellington grocery store Sun 2 Moon Ltd has been ordered by the Employment Relations Authority to pay $53,000 in penalties and arrears for employment law breaches.

The store is located on Willis Street in central Wellington and operated by Luv Kumar Khatter. It required a migrant worker to pay more than $10,000 in premiums, by way of a payment of $5,000 upfront, $3,240 in regular small cash payments, and $2,167 funding company expenses on the employee's personal credit card.

The ERA ordered this money to be returned to the employee, citing premiums as an abuse of the power imbalance between employers and employees, particularly where the employer is effectively taking advantage of a migrant worker.

It also ordered that a total of $25,000 be paid as a penalty for breaching the Minimum Wage Act, Employment Relations Act, Wages Protection Act and Holidays Act. A further $28,781.23 is to be paid to the employee for minimum wage arrears, reimbursement of premiums and holiday pay arrears.

Labour Inspectorate Regional Manager Loua Ward says the exploitation of migrant workers in New Zealand is unacceptable.

She says targeting employers that exploit vulnerable migrant workers is a key focus area for the Inspectorate.

"The level of non-compliance identified during this investigation was very disappointing given the significant breaches of minimum employment standards," says Mrs Ward.

"This ruling sends a clear message to employers that failure to comply with minimum employment labour standards will not be tolerated."

Last updated on the 16th September 2019