The Ministry of Business, Innovation and Employment (MBIE) says a Taranaki dairy farm is to pay at least $87,000 for serious employment law breaches after a Labour Inspectorate investigation.

The Employment Relations Authority has directed that discussions between the employees and Allan Marx of Vintage Farm Trust continue, with Mr Marx accepting that further arrears are owed as a result of his failure to pay minimum wage or for public holidays.

So far the arrears have been assessed at $64,000, with a $23,000 penalty. The arrears paid so far have gone to five employees who were working on the farm during the Labour Inspectorate investigation, as well as to six former employees.

MBIE says the issue has been further complicated by Mr Marx's failure to maintain records of his employees' hours or to keep copies of employment agreements.

A Labour Inspector first visited the farms in November 2014 as part of a routine audit of dairy farms in the region. Two couples and a teenager were living and working between the two farms.

MBIE says the couples were on joint employment agreements being paid between $25,000 and $33,000 each, which meant they were being paid well below minimum wage for the long hours they worked. These joint employment agreements were also illegal, as every employee in New Zealand must be given a separate written employment agreement.

The investigation revealed Mr Marx failed to correctly pay his employees for working on public holidays, opting to give an extra $50 instead of their minimum entitlements.

"It is unacceptable for employers to take advantage of employees by failing to meet basic legal requirements like paying the minimum wage or keeping proper records," says Labour Inspectorate Regional Manager Natalie Gardiner.

"With the discussion around arrears ongoing, this case perfectly illustrates the risk a farmer takes on when they don't keep sufficient employment records.

"Keeping records of the days and hours your employees work is a longstanding legal requirements in New Zealand which we expect every employer to meet - ignorance is not an excuse for breaking the law."