A whopper of a mistake

The Ministry of Business, Innovation and Employment (MBIE) has barred Burger King from hiring new migrant workers and extending the visas of current migrant staff for a period of one year.

The MBIE has found that the company breached the Minimum Wage Act 1983 in paying a salaried manager less than the minimum wage.

The imposition of this ban is a timely reminder to all employers to ensure that they comply with the minimum entitlements under New Zealand’s employment laws, but importantly, it is the first clear example of a new era of enforcement action where the government will not hesitate to apply sanctions against any employer where they discover potential for migrant exploitation.  Stamping out migrant exploitation is a major aim of this government in its first term.

From an employment law perspective, all employers must comply with the Minimum Wage Act 1983 by paying their employees at least the minimum wage.  As at September 2018, this is $16.50 an hour.  There is perhaps a misconception that this is only in relation to waged employees, those who are paid by the hour.  This is not the case.  Employers need to ensure all employees, including those on a fixed salary, are paid at least the minimum wage for all hours worked.

Where an employer is found not to be complying with New Zealand’s employment laws, and the Labour Inspectorate has taken enforcement action against them, they can then be placed on a List of Non-Compliant employers.  They will then be subject to a stand down period.  The length of this period will depend on the enforcement action taken, and also the number of infringements.

If an employer has a history of non-compliance with New Zealand’s employment law or is on this list, Immigration New Zealand will decline any work visa applications, as well as any applications for employer status (such as accreditation).  Therefore, a ban such as that imposed on Burger King has significant implications from an immigration perspective.  This is because it will prohibit the employer from supporting any work visa applications from prospective employees during this period.  It will also affect the ability of existing temporary visa holders currently employed from renewing their work visas so they can continue working,  where their visas are due to expire during the ban period.

Significantly, it will also prevent current migrant employees from applying for and being granted residence during this period too.  Therefore, the imposition of any ban is highly likely to cause significant problems for an employer in this situation to retain existing staff as well as attract any new employees to its business.  For a franchise like this, operating 82 stores in the hospitality sector where there is significant reliance on migrant workers, there are tough times ahead.

The imposition of this ban on Burger King is a reminder to all employers of what can happen if you are not aware of how many hours ALL of your employees are working so you can calculate what their effective hourly rate is.

For us, we are a little surprised because we believed the government were looking to make an example of a construction company to send the message, but there is no doubt the message has been received loud and clear across the entire employment market.

For those businesses that rely on migrant workers to supplement their workforce, Burger King should now make you aware of how a failure to comply with these requirements can have serious consequences from an immigration perspective.  If you are uncertain whether your business is complying with New Zealand’s employment laws, or whether it has robust systems in place to ensure it is complying with New Zealand’s immigration laws, we suggest you contact a member of Lane Neave’s Workplace Law Team.

Workplace Law team

If you have any queries in respect of the above, or any other Workplace Law issues, please contact a member of Lane Neave’s Workplace Law team:

Employment: Andrew Shaw, Fiona McMillan, Gwen DrewittMaria Green,  Hannah Martin, Joseph HarropHolly StruckmanAlex Beal, Giuliana Petronelli, Abby Shieh
Immigration: Mark Williams, Rachael Mason, Daniel Kruger, Nicky Robertson, Julia StrickettKen Huang, Mary Zhou, Shi Sheng Cai (Shoosh)Sarah Kirkwood, Janeske SchutteLingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew ShawFiona McMillan

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