Tess Nichol is an NZME. News Service reporter.

$35m paid out following holiday pay botch-up

At least $35 million has been paid in outstanding holiday pay by 25 companies including the police department, Bunnings and Datacom following revelations of a payroll glitch in March. Photo/ file
At least $35 million has been paid in outstanding holiday pay by 25 companies including the police department, Bunnings and Datacom following revelations of a payroll glitch in March. Photo/ file

At least $35 million has been paid in outstanding holiday pay by 25 companies and agencies following revelations of a payroll glitch in March.

But the Council of Trade Unions (CTU) warns the figures are just the tip of the iceberg and the figure could be tens of millions of dollars more.

Information released to the CTU by the Ministry of Business, Innovation and Employment (MBIE) showed nearly 26,000 workers had been repaid money owed, with most receiving a sum of $500 or less.

Some workers had been owed up to $1800 in holiday pay which had been miscalculated in a payroll botch-up dating back to 2012.

The companies that have now paid arrears include Datacom, Oceania Group and Stretton Clothing Company, according to MBIE documents.

Labour Inspectorate manager George Mason wrote in response to the CTU's Official Information Act request that a series of completed investigations had resulted in 25 businesses and agencies paying arrears.

A further 34 organisations were still being investigated including Fonterra, Auckland Council and ANZ.

Fonterra confirmed to NZME it had received an audit and was fully cooperating with MBIE's investigation.

The open investigation list included employers who had been brought to the Labour Inspectorate's attention either by fitting the criteria or because a complaint had been received by MBIE.

Mason said it was important to note that breaches did not mean employers' actions had been deliberate. But even if underpayment was a mistake, the Inspectorate still took the breach seriously.

The CTU called the repayments "the tip of the ice berg", saying the Labour Inspectorate was not well-resourced enough to make sure all businesses had paid workers their due.

"The information we have received also reveals ongoing investigations into a further 34 organisations," said CTU spokeswoman Huia Welton.

"How much money is owed to these working people is unknown but it seems likely to be tens of millions.

"We believe that the problem is far bigger and that the Government has only dipped its toe in the icy water."

Employers had a responsibility to make sure their systems were working to properly pay their staff, she said.

The holiday pay problem was first identified at MBIE, which had paid some of its 3000 staff the wrong amount in holiday entitlements.

Changes to the Holidays Act in 2003 had made payments more complicated, and subsequent attempts to simplify payments had not worked.

As a result, some employers were still struggling to calculate workers' holiday pay, Workplace Relations Minister Michael Woodhouse said in March.

- NZ Herald

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