The Employment Relations Authority has ordered Greywacke Farms Limited and its director Dietmar Kopetschny to pay the penalty after finding the business failed to keep correct wage, time, holiday and leave records. Greywacke ran two farms supplying milk to Fonterra.
About half of the 24 affected workers were migrants on temporary work visas.
Kopetschny was made personally liable for $10,000 in penalties, $7500 of which would be paid out to three former employees.
The Labour Inspectorate, part of the Ministry of Business, Innovation and Employment (MBIE) investigated in 2019 after receiving complaints from former and current employees.
"The ERA found the breaches caused significant material hardship to some of the low paid employees and gave the employer an unfair competitive advantage over businesses that comply with legal requirements. The ERA determined the breaches were intentional and could have been avoided by using publicly available guidance from MBIE or Federated Farmers, or investing in a more efficient and compliant payroll system," MBIE said in a statement.
Labour Inspectorate acting regional manager Callum McMillan said the dairy farming industry had been a focus for several years in a bid to lift employment law compliance.
"The industry made significant improvements to put assurance systems in place and have readily available support for farmers on matters of employment.
"This makes it even more disappointing to find there are still dairy farmers that undermine minimum employment standards. Employers cannot cut their overheads by taking advantage of workers.
"The inspectorate has also engaged with Fonterra about promoting compliance within their supply chains. Large brands like Fonterra have an important role to play in taking leadership to ensure a fair treatment of workers from the top down. Failing to do so damages the reputation of the brand, the industry and of New Zealand as an exporter."
