Rangiora restaurant owner ordered to pay ex-employee $30,000

A Rangiora restaurant owner who underpaid a former employee and took money from his wages has been ordered to repay almost $30,000 dollars in arrears.

The Employment Relations Authority (ERA) found businessman Vijay Singh, the sole shareholder and director of Laxmi Narayan Restaurant Ltd, trading as Karfa Moroccan Cuisine, unlawfully deducted money from his restaurant manager's wages over a two-year period.

Singh also underpaid the employee, failed to pay him for holidays and leave, and under-recorded the hours the man worked in exchange for having helped him obtain a work visa.

The ERA ordered the restaurant pay the employee $19,320 in wage arrears, $3865 in unlawful deductions, $3,674 in holiday and leave arrears and interest of $2019. Singh was also ordered to pay a further $11,250 in penalties to the Crown.

The order came after a Labour Inspectorate investigation into the matter.

Labour Inspectorate head of compliance and enforcement Simon Humphries said the ruling sent a strong message that unlawfully taking money from an employee's wages was unacceptable.

"Unfortunately, there are employers who abuse the visa process. They may agree to pay a worker a certain amount during the visa approval process, but once the worker is in New Zealand the employer pays them less than the minimum wage.

"Some employers also illegally deduct money from the employee's wages to circumvent the contractual agreement made during the visa approval process."

He said employers must ensure they paid employees what was agreed during the visa approval process, otherwise they risked being penalised, having to repay underpayments and not meeting accreditation requirements.

In this case, the ERA ordered payment of arrears for the full difference of what was promised during the visa approval process and what was eventually paid.

The employee was paid for 34 hours at the contractual rate but was working up to 60 hours a week, being paid well under the minimum wage and significantly less than what had been agreed.

"The pay order and penalties imposed on Mr Singh and his business should serve as a warning to other business owners who consider exploiting their workers by failing to pay them what was contractually agreed."

  • Anyone who suspects they may be a victim of migrant exploitation or are suspicious of potential migrant exploitation happening can call Employment New Zealand's free number 0800 200 088. Interpreters are available for this service.