New Zealand’s Workplace Compliance Landscape and Implications for Employers
New Zealand’s Ministry of Business, Innovation and Employment (MBIE) has disclosed that in accordance with the Official Information Act 1982, Immigration New Zealand (INZ) significantly intensified its workplace site inspections by 32%, and the Labor Inspectorate amplified workplace investigations by 120% during the six months leading up to July 31, 2023, compared to the preceding six-month period.
While ongoing assessments are still in progress, among the completed Labour Inspectorate investigations, nearly 90% of employers were found to be non-compliant. These figures align with trends observed within the industry, and it is anticipated that they will continue to rise as MBIE’s enhanced compliance initiatives become more established. The substantial upsurge in workplace investigations in New Zealand is a direct result of the government’s commitment to reducing what was perceived as an excessive dependence on migrant labour and curbing migrant exploitation.
To bolster these efforts, significant changes have been made to key elements of workplace legislation, encompassing immigration, employment, and corporate law. These changes have simplified the process of penalising non-compliant employers. Additionally, a dedicated 0800 number has been introduced to facilitate the reporting of allegations of non-compliance, while $50 million in funding has been ringfenced for this purpose. The government has publicly committed to allocating additional resources to investigate claims of workplace non-compliance. These amendments make it easier for MBIE to identify and probe non-compliance in the workplace, and they also impose more severe penalties on employers, even for “low-level” breaches.
The government has publicly committed to allocating additional resources to investigate claims of workplace non-compliance.
Starting from January 6, 2024, the introduction of stricter workplace legislation means that employers who permit migrants to work in a manner inconsistent with their visa conditions, such as in a different role or location, may be subject to a fine of $3,000 per affected employee, even in cases of genuine mistakes or reasonable attempts to comply. They may also be publicly listed as non-compliant employers and potentially face restrictions on hiring migrants for a specified duration. Accredited employers may find their accreditation status not renewed, effectively hindering them from hiring most migrant workers in the foreseeable future. This signifies a significant shift, as even employers who have diligently pursued compliance can now face fines and public exposure. The approach is shifting toward strict liability, with substantial consequences for non-compliance.
While the consensus among Kiwi employers is that the prevention of migrant worker exploitation is crucial, there is a growing concern that the pendulum has swung too far in the opposite direction. It is anticipated that numerous “good” employers may be targeted and penalised under this new regulatory framework for relatively minor infractions. Workplace investigations may be initiated randomly, during the employer accreditation renewal process, or in response to tips from disgruntled employees, related unions, or customers, which occurs more frequently than expected. In any case, workplace investigations have become an inevitability.
Experience demonstrates that mistakes can easily occur. Many large, reputable employers in New Zealand lack workplace compliance systems suitable for their organisation’s size, and some key personnel, including HR staff, may not fully comprehend their obligations as employers, at least to the required standards. It takes only one or two tips to alert MBIE to a potential violation, triggering a site visit.
Consequently, investing in proactive compliance measures for the workplace is far more advantageous than reacting to an incident and seeking legal expertise to mitigate the situation.