As an employer, you must keep wage and time, holiday and leave records that comply with New Zealand’s Employment Relations Act 2000 and the Holidays Act 2003. Why? So you can show that you’ve correctly given your employees all minimum employment entitlements, including minimum wage and annual holidays. If you don’t consider employee wage records to be serious, the recent saga of a Kaikohe Chinese takeaway employee whose employer received a significant penalty from the Employment Relations Authority is a powerful case in point.

The case was Gu v Hui 18 Limited t/a Sun City Chinese Restaurant, which resulted in the company behind the Kaikohe takeaway shop restaurant being ordered to pay a former employee more than $23,000 in lost remuneration, reimbursement of work visa costs and compensation for the humiliation, loss of dignity and injury to his feelings.

The employee was vastly overworked – but the real problem was a lack of HR records

  • Shijiang Gu commenced employment with Hui 18 in March 2020 and left in April 2021. After a period of work during which Mr Gu worked up to 80 hours, occasionally seven days a week, Mr Gu resigned, then lodged a claim with the Employment Relations Authority (the Authority) for constructive dismissal and was owed significant wage arrears.
  • The claim was accepted, and the employee was awarded $15,000 for his dismissal, $1,495 in reimbursements for work visa costs, and an additional $6,593.75 in lost remuneration.
  • Mr Gu’s employment terms had outlined that he would be paid $52,000 per annum, with 40 hours of work per week. Mr Gu however claims this wasn’t the case and he sometimes ended up working up to 87 hours over seven days. Notably, the additional hours were worked and not paid for whenever Mr Gu would arrive back into the restaurant during his time off to have his “free dinner” at the restaurant, which the Authority identified as a key term of the employment agreement as this enticed Mr Gu into signing the employment agreement in the first place in consideration of the amount of money Mr Gu would ultimately save by not funding his own meals.
  • Confirming details around payments that had been made by Hui 18 to Mr Gu was challenging. The information that had been provided was ambiguous, incomplete, and contradictory. Hui 18 didn’t report all cash payments that had been made to Mr Gu during the employment term to the Inland Revenue Department, and it didn’t deduct PAYE from these cash payments.
  • Because of these inconsistencies in records, it was unable to determine the actual amount of wage arrears that Mr Gu was owed, or what penalties should be imposed on Hui 18.
  • The Authority found that amongst other breaches, Hui 18 also breached their obligations by failing to keep accurate employment records.

What does employment law say about records for staff?

Employers must keep records for all hours worked and wages paid, and holiday and leave records of employees (past and present) for seven years, as required by the Employment Relations Act 2000 and the Holidays Act 2002. These types of information must be readily available when requested.

Good record-keeping protects the interests of both parties; it ensures that employees’ pay and leave details are correct and ultimately prevents misunderstandings if there is a dispute in the future.

Constructive dismissal, in particular, is a serious matter which will cost you if it lands in court and is proven. Keeping accurate records with enableHR prevents this.

If you don’t take record keeping seriously now, the new wage theft law may catch you out

MP Ibrahim Omer has launched a Bill to criminalise the theft of employees’ wages by employers, and he’s not alone – the Council of Trade Unions (CTU) and other worker associations support the Bill. Omer’s Members’ Bill would add wage theft to the Crimes Act, with a maximum penalty of one year in prison or a $5,000 fine for an individual, or a $30,000 fine for a company.

In a media release, CTU President Richard Wagstaff said “Wage theft is an insidious practice that tends to target low-income and immigrant workers. We see too many stories of hard-working people being ripped off by unscrupulous bosses with no real repercussions.”

enableHR helps underline good record-keeping to stay compliant.

Poor employer record-keeping can easily lead to problems in the future. Good thing, that enableHR can lessen the risk.

Use enableHR’s tools, Knowledge Base, and workflows to underline your HR decisions and if employees do happen to leave abruptly, you’ll know there’s no risk of a costly surprise in court.

We believe HR should be simple. Simple enough for you to run your business confidently. Inside enableHR is everything you need to manage the entire employee lifecycle, from recruitment and onboarding to managing your people and termination. If you’d like to see enableHR in action, contact us to learn more about how we can help your business.

Get a demo and see how enableHR allows you to easily manage your people.

Looking to take your HR to the next level? Our team is happy to answer all your questions. Call us on our toll-free number 0800 510 004, or fill out this form for a prompt call-back.