Intentional Wage Theft Now Criminalized in New Zealand

Following the introduction of a similar reform in Australia in January, New Zealand has now criminalized intentional wage theft by employers. As “intentional wage theft” doesn’t come with a specific legal definition under the New Zealand Crimes Act, its meaning would fall to the common law definition and interpretation by the court. A working definition would be intentional underpayment of wages or salary due to an employee. 

The maximum penalties for individuals such as company directors is imprisonment for a term not exceeding one year, a fine not exceeding NZD $5,000, or both, and for corporations, for a fine not exceeding NZD $30,000.

Employers with operations in New Zealand can look to some extent to the approaches recommended for compliance in Australia. Employers should carefully review their payment practices and procedures, both with respect to the terms and conditions offered to employees – to ensure they don’t fall below the statutory minimums – and also to confirm that the correct amounts are being paid in practice. 

Unlike with the Australian legislation, however, the New Zealand law locates the new offense within the New Zealand Crimes Act itself, to be prosecuted by the Police Prosecution Service in the usual way rather than by an ombudsman. This may affect the enforcement approach, and time will tell if some challenges are presented by the fact that the police will generally not be specialized in employment matters, particularly for the private sector. 

Employers are well advised to ensure staff are paid correctly so as to avoid an accusation of intentional wage theft.