Migrant workers exploited in city

An Otago Daily Times investigation has uncovered exploited migrant workers in Dunedin's hospitality and beauty industries.

Migrants are underpaid, often without holiday or sick pay and too afraid to complain to authorities.

Employment law specialist Jen Wilson suspects dozens are affected.

In one case last year, a migrant hospitality worker was being paid $4.37 an hour - far below the minimum wage of $13.75 an hour at the time, Ms Wilson, a senior solicitor at Jenny Beck Law, said.

The woman received $612 for 70 hours' work, half of which had to be returned to the employer in cash. The arrangement made it appear the employer legitimately employed the worker for above minimum wage on a 40-hour-a-week salary.

The worker was also told her working visa would only be renewed by the employer if she paid tens of thousands of dollars, Ms Wilson said. The worker was ultimately dismissed under the 90-day trial rule.

Other migrants in similar situations also had approached Ms Wilson.

''They didn't pursue it because they were too frightened,'' she said.

A Ministry of Business, Innovation and Employment (MBIE) spokeswoman said the Labour Inspectorate issued two ''enforceable undertakings'' to Dunedin employers during the past 12 months, both in the hospitality industry.

One was for a lack of written employment agreements and the other was for failing to keep time, wage, holiday and leave records.

The employers complied with the enforceable undertakings, she said.

Chef Chris Dick said he discovered the issue while working in a consultancy role for another Dunedin businessman.

During his time working for the man, Mr Dick was told staff were being underpaid. One Chinese worker stood out in his mind.

''I will never forget it. He [the business owner] said he only pays her $6 an hour and she works seven days a week,'' Mr Dick said.

''She was the hardest worker I have ever seen, but totally exploited. It was criminal, it really was.''

The business owner, when approached by the ODT, denied the claims.

''My staff are paid everything - not underpaid - everything [is] by the law,'' he said.

Staff were given free accommodation also, he said.

Mr Dick said the owner offered accommodation to some employees and their families, but it was used to control staff, as the owner threatened to evict their families from his accommodation, or made threats about their ability to get other jobs if they left, Mr Dick said.

He had visited the accommodation and felt the conditions were ''totally like a sweat shop''.

The MBIE spokeswoman confirmed the Labour Inspectorate had investigated the man's businesses last year as a result of complaints.

''The investigation found that, in general, the businesses were complying with minimum employment standards and where any issues were identified they were rectified immediately,'' she said.

''No compliance action was required.''

Mr Dick said that finding was unsurprising, as the owner had ''it so sewn up'' and staff were afraid of losing their jobs if they talked.

Another migrant business owner explained to the ODT how businesses could hide their underpayment of staff.

He claimed some hours would be paid to staff through payroll at minimum wage and all additional hours would be paid under the table at below minimum wage and, in some cases, not at all.

Salaries also allowed business owners to work employees longer without additional pay, he said.

Dunedin Multi-Ethnic Council migrant women and children facilitator Afife Harris said she was aware of several migrant women working for less than the minimum wage.

They were afraid of complaining or coming forward as they needed the money their jobs provided, even if it was less than they were entitled to.

''It's not about the job, the money is needed for living,'' she said.

''They are desperate to get any work, even if they pay them $5 or $10 an hour.''

In some cases, employers would help extended family members get jobs, only to then take advantage of them, Mrs Harris said.

Ms Wilson said the problem was often hidden and difficult to quantify, but many migrants would be affected in some way.

The issue was further complicated by employers who would pay for migrants' travel costs to come to New Zealand, or provided accommodation, and then expected them to reimburse the costs from their salary or wages, she said.

''It might be legal, but is it right? It doesn't sound right,'' Ms Wilson said.

''There's a feeling from lots of New Zealand employers that because people come from low-wage places, that even if you pay them $4-$5 an hour, that's great for them.''


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