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In New Zealand, the Labour Inspectorate is the official public body that ensures that employees receive minimum rights and standards across the country. The Labour Inspectorate employs a number of Labour Inspectors who have the power to inspect and investigate businesses and their employment practices. Your business could face significant penalties for breaching minimum employment standards. This article explains the role of Labour Inspectors, how their investigations work and the possible penalties for employers who breach minimum standards.

What Is the Role of Labour Inspectors?

The role of Labour Inspectors is to inspect and investigate different workplaces to ensure that employers are meeting their minimum obligations. By contrast, Labour Standards Officers:

  • decide which complaints are investigated by Labour Inspectors; and 
  • manage the resolution of issues. 
  • conduct audits of employers. 

Labour Inspectors are responsible for investigating suspected breaches of:

  • minimum wage obligations, if you pay your workers less than the minimum wage;
  • holiday pay issues;
  • leave entitlements, where your employees do not get the basic leave they are entitled to;
  • wage deductions; and 
  • the record keeping of employers.

Your workplace may be visited by a Labour Inspector. As an employer, you have the right to ask that the Labour Inspector show their warrant and prove that they are a legitimate Labour Inspector. All Labour Inspectors must carry warrants when they are exercising their powers.

How Do Labour Inspections Work?

Labour Inspectors have a wide array of powers they can exercise when they are inspecting workplaces or investigating suspected breaches of employment law. These inspections can begin: 

  • through a complaint or tip-off from an employee; or 
  • as a result of an audit. 

The Labour Inspectorate has quite wide discretion to decide when it inspects a workplace or launches an investigation. The main determinant is the nature and severity of a suspected breach. There are only a limited number of Labour Inspectors and the priorities of the Labour Inspectorate change over time.

In terms of how inspections actually work, Labour Inspectors can exercise any of their powers when carrying out an investigation or enforcing employment law. These powers include the ability to:

  • enter a workplace (or what is thought to be a workplace) at any reasonable hour;
  • bring other people with them into the workplace if they deem it necessary, such as the police;
  • interview anyone at the workplace, including you, other managers and employees;
  • see and take copies of wages and time records, holiday and leave records, any documents with payment information or any document in general that the Labour Inspector thinks will help them determine whether employment laws have been complied with;
  • see and take copies of strikes and lockout information; and
  • question employers about compliance with any employment-related laws. 

Where a Labour Inspector requests documents or information, you must make this evidence available right away. If you fail to provide any information, the Labour Inspector can bring an action against you for a costly penalty.

What Do I Need To Know If My Workplace Is Being Inspected?

If a Labour Inspector investigates your workplace, you should immediately seek legal advice from an employment lawyer. Inspections can be serious and the penalties can be hefty if you are found to be in breach of employment laws. 

They may take many types of enforcement action against you in the Employment Authority or Employment Court against employers depending on the circumstances, including: 

  • financial penalties;
  • compensation to employees; and 
  • even a ban on you or your business from acting as an employer for up to ten years. 

Note that you do not have to answer questions from a Labour Inspector if you suspect that your answer might incriminate you with regard to a criminal matter. However, other than that, you need to answer their questions. In general, you should aim to be as constructive, helpful and cooperative as possible.

If you are not present at the workplace when the Labour Inspector arrives, they are still able to begin an inspection and carry out any of their powers. However, they must leave a notice for you as the employer.

Key Takeaways

The Labour Inspectorate ensures that employees in New Zealand receive minimum rights and standards. Labour Inspectors have a range of legal powers to carry out inspections and investigate workplaces where there are suspected breaches of minimum standards. These include the ability to: 

  • enter a workplace; 
  • interview anyone there; 
  • take employment records; and 
  • question you and your employees about the workplace and any compliance issues. 

If you have any questions about the Labour Inspectorate in New Zealand or how their inspections operate, you can contact LegalVision’s New Zealand employment lawyers on 0800 005 570 or complete the form on this page.

FAQs

What is the Labour Inspectorate?

The Labour Inspectorate is the New Zealand public body charged with ensuring that employees receive minimum legal rights and standards.

Can a Labour Inspector Inspect My Workplace If I Am Not There?

Yes, they have the ability to enter and inspect your workplace no matter whether a manager or senior leader is present. However, they must leave a note for you.

How do Labour Inspectors Decide What Businesses To Inspect?

Labour Inspectors have wide discretion to decide whether to investigate any suspected workplace or breach of standards. The Labour Inspectorate has limited resources and its priorities change from time to time.

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