The Crimes (Theft By Employer) Amendment Bill (the Bill) is a private member's bill that was recently introduced to Parliament by Labour MP Ibrahim Omer. If enacted, the Bill will amend the Crimes Act 1961 to make wage theft by employers a criminal offence.
Ibrahim Omer has said he personally experienced exploitation by his employers when he first came to New Zealand in 2008 as a refugee from war-torn Eritrea. Omer has described wage theft as an issue that predominately affects New Zealand's migrant, Māori and Pasifika communities, and described the problem as "systemic" and "widespread".
At present, employees who are the victim of wage theft usually are limited to pursuing a wage arrears claim in the civil jurisdiction. This involves filing a claim in the Employment Relations Authority (ERA) seeking an award for the unpaid amount. Applicants to the ERA can also seek penalties against their employer for breaching their employment agreement and interest on the unpaid amounts.
But bringing a claim in the ERA can be time consuming and costly, which may deter victims of wage theft from pursuing their rights. There is also an apparent double-standard in the law because employees who steal from employers can receive a criminal conviction for theft, whereas wage theft is usually treated as a civil matter.
The explanatory note of the Bill states "Existing processes are too complex, and can be a deterrent for those that are victims of wage theft. The new offence created by this Bill will capture employers who owe wages and intentionally do not pay them to the employee."
The Bill defines wage theft as a situation where an employer owes an employee money (under their employment agreement or as otherwise required by law) and intentionally fails to pay the money to the employee. Mistaken underpayments, such as holiday pay errors, would not be captured by the Bill.
If enacted, the Bill would introduce the following penalties for employers who are found guilty of wage theft:
- A fine of up to NZ$5,000 and/or up to one year imprisonment for natural persons, or
- A fine of up to NZ$30,000 for employing entities.
As currently drafted, the Bill would not extend criminal liability to directors or officers of an employer-entity that aided and abetted wage theft. The penalties are relatively low compared to other jurisdictions, such as Australia. In Queensland for instance, wage theft carries a maximum penalty of 10 years' imprisonment. In Victoria, it carries a penalty of up to AU$218,088 or up to 10 years' imprisonment for individuals, or a fine of up to AU$1,090,440 for companies.
The Bill is at the beginning of the parliamentary process and is yet to have its first reading. We will provide further updates as the Bill progresses.
If you have any questions about this upcoming law change or would like to discuss any other employment law topic, please get in touch with one of our team.
This article was co-written by Hamish Kynaston (partner), Tom Sanders (senior solicitor) and Raukura Doyle (law clerk).
