Auckland café boss fined for illegal wage deductions

On: 5 June 2014

The director of a central Auckland café is to pay more than $14,000 in penalties and wage arrears for requiring an employee to pay back part of their wages under threat of losing their work visa.

The Ministry of Business, Innovation and Employment’s Labour Inspectorate took the director of Viz Café to the Employment Relations Authority after finding he had regularly required an employee to hand back $200 a week in cash from the wages debited to her bank account.

Labour Inspectorate northern region manager David Milne says the employee was told the business was not profitable and payments were needed in order for her to keep her work visa.

“The employee was required to make a total of 17 such payments over a six-month period, with the deductions bringing her net income to well below the minimum wage.

“The café director, Mr Zhang, took advantage of a vulnerable employee through deliberate and calculated breaches of employment laws.”

In its determination the Employment Relations Authority said Mr Zhang is to pay $6120 in wage arrears, as well as a $5000 penalty for breaching the Wages Protection Act 1983.

The Authority also determined $2000 of the penalty is to be paid to the employee, rather than the Crown, at the request of the labour inspector.

Mr Zhang is to pay an additional $3000 penalty for failing to comply with an Improvement Notice issued by the Labour Inspectorate.

“The Labour Inspectorate welcomes the Authority’s determination, with the case serving as a clear warning to other employers who breach minimum labour standards.

“The Labour Inspectorate will not tolerate these breaches and will ensure accountability for them.”

Anyone in this situation, or who knows of people in this situation, is encouraged to phone MBIE’s call centre on 0800 20 90 20 where concerns will be handled in a safe environment.

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