Role of Labour Inspectors
Labour Inspectors work with employers and employees (and other people and agencies) to make sure that workplaces follow at least the minimum employment standards and laws as set out in the following employment-related Acts:
- Employment Relations Act 2000
- Equal Pay Act 1972
- Holidays Act 2003
- Minimum Wage Act 1983
- Parental Leave and Employment Protection Act 1987
- Volunteers Employment Protection Act 1973
- Wages Protection Act 1983
Their role is to monitor and enforce compliance with employment standards as well as other specific duties outlined in the various Acts. They use targeted investigations and audit programmes to find breaches of employment standards and put them right.
Some areas that Labour Inspectors look at include:
- the minimum wage
- holiday pay
- wage deductions
- recording keeping
- parental leave.
Labour Inspectors investigate potential breaches impartially before making a decision. For some cases (eg where vulnerable workers have been exploited or where rights have been breached repeatedly or blatantly), Labour Inspectors may look at penalty actions, publicise the case and even aim to remove employers from the labour market. For less serious breaches of employment standards (eg one-off accidental mistakes) an inspector might use tools such as enforceable undertakings or improvement notices, to require employers to change their workplace practices and repay any arrears owing. Investigations are prioritised depending on severity, facts, evidence and circumstances, balanced with resourcing allocation and specific Inspectorate focus at the time.
Labour Inspectors can’t advise you about general disputes and some contractual matters contained in employment agreements, or pay rates (except the minimum wage).
Some of the things that Labour Inspectors can do (depending on the outcome of an investigation and the circumstances of the particular case) include:
- agree to an enforceable undertaking with an employer
- issue an improvement notice
- issue an infringement notice for breaches of record-keeping obligations (including employers retaining a signed copy of each employee’s employment agreement ($1,000 per breach up to a maximum of $20,000 in any 3-month period)
- take actions against employers who breach employment standards and also against people involved in a breach of employment standards eg directors, who are knowingly and intentionally involved in the breach by the employer
- apply to the Employment Court for a declaration of breach for a serious breach of minimum entitlements. Labour Inspectors are the only people (employees and their representatives can’t do this) who can apply to the court for a declaration of breach. Labour Inspectors may do this if they think the employer seriously breached or was involved in a serious breach of a minimum entitlement provision. A declaration of breach means that if someone wants to apply for an order against a person (including a company) to enforce employment standards, they don’t have to prove the breach (or involvement in it). Following a declaration of breach (or at the same time) inspectors can apply for:
- a monetary penalty of up to $50,000 against an individual, or for companies; the greater of $100,000 or 3x the financial gain made by the company (in relation to the breach)
- a compensation order to pay employees who have or are likely to have suffered a loss or damage resulting from the breach (eg lost wages)
- a banning order (stopping people from being employers, being officers of employers or hiring employees for up to 10 years) for things like serious or persistent breaches of employment standards or conviction of an offence under section 351 of the Immigration Act 2009 (Immigration Officers can also apply for these)
- apply to the Employment Relations Authority for a penalty against an employer or person involved in a breach of employment standards (including breaches of the obligation to retain a copy of an employee’s employment agreement or intended employment agreement, record keeping provisions and minimum entitlements). Employees can apply for penalties against an employer too, but not against a person involved in a breach
- apply to the Employment Relations Authority to recover from the employer (or people involved in a breach), wages or other money owed as a result of the breach of minimum entitlements. Employees can do this too, but they need the permission of the Authority to take an action against a person involved in a breach
- recover any penalty due to be paid to the Crown in the District Court
- apply for sanctions against a person who doesn’t comply with an order, determination, direction or requirement made by the Employment Relations Authority/Employment Court/District Court. This type of application might be made in cases where:
- the matter came from a breach of employment standards, or relates to the payment of wages or other money owed or penalties ordered, and
- the breach wasn’t minor or inadvertent, and
- there was no reasonable excuse for the breach, and
- there are reasonable grounds for believing that if a compliance order was made the person wouldn’t comply with it.
What employers need to know if a Labour Inspector comes to their workplace
If someone comes to your workplace and says they are a Labour Inspector but you are unsure, you should ask to see their warrant.
Labour Inspectors can:
- come into any workplace (or what they think is a workplace) at a reasonable hour and can bring others with them (including the police)
- interview anyone
- ask to see and take copies of wages and time records, holiday and leave records, other documents with remuneration information or any other document that the Labour Inspector reasonably believes will help them determine whether the relevant Acts have been complied with. You have to make these available right away and if you don’t, the Labour Inspector can bring an action against you for a penalty
- ask to see and take copies of strikes and lockouts information
- question employers about compliance with any of the specified employment-related laws.
If a Labour Inspector sees or gets a copy of a document from you, they have to keep the information safe and can’t disclose it unless they need to disclose it for the purposes of a specified employment-related Act or they need to disclose it to or share it with a regulatory agency (in accordance with the Privacy Act 1993).