The Labour Inspectorate is assessing information that an employee is being paid $3 an hour at a South Auckland Indian restaurant.
Inspectorate regional manager Counties Manukau, Loua Ward, said the Ministry of Business, Innovation and Employment received a complaint earlier this month from a former employee at an Indian cafe who claimed he was paid $200 a week to work between 65 and 70 hours.
"We are currently assessing the information and cannot provide further comment," Ms Ward said.
The restaurant owner denies any wrongdoing and told the Herald that the employee had "made the story up" after he was dismissed for allegedly assaulting a female co-worker on New Year's Eve.
The employee said although he received a weekly pay of $642.32, which was banked into his account to meet immigration visa requirements, he had to return $440 in cash to the employer.
"Normally I was working around 65-70 hours per week and was getting only $200 per week," the employee said in his complaint.
The man also claimed the employer made him work at another Indian restaurant he owned despite knowing he had a visa that allowed him to work only at the outlet in Manukau.
The owner said the allegations were a "fabrication" and "lies", and showed employment documents which he said proved the employee worked between 40 and 42 hours per week and was paid above the adult minimum wage of $14.75 an hour.
He said the employee was never asked to return any part of his pay but he transferred $390 on December 17 into the company's account as a "set up".
The employee was suspended following an altercation with two other workers at the restaurant on December 31, and was subsequently dismissed, the restaurant owner said.
A police spokeswoman confirmed police were called to an incident at the restaurant on December 31, but found insufficient evidence to charge anyone.
An employment standards task force was set up in South Auckland following concerns about workplace abuse, and the inspectorate was allocated $32 million in this year's Budget to strengthen compliance with minimum employment standards.
"The Labour Inspectorate has an on-going work programme that sees hospitality as a focus area," Ms Ward said.
"Another (Indian chain) restaurant was also visited by the inspectorate as part of this programme but, as the audit is still in progress, we have no further comment to make."
She said addressing migrant exploitation was a priority because migrant workers were a "particularly vulnerable section" of the workforce who were less likely to be aware of their rights and entitlements than New Zealand workers.
Labour Inspectorate general manager George Mason said last month that South Auckland was a hotbed of red flags because of its high numbers of young and migrant workers working in target industries including hospitality, retail and horticulture.