More than half of Bay of Plenty kiwifruit contractors have been found breaching employment obligations, with one owing at least $25,000 to workers.
The Labour Inspectorate operation showed 53 per cent of employers failed to meet all minimum employment standards, such as providing employment agreements and paying at least the minimum wage.
Inspectors carried out audits on 62 labour contracting companies and interviewed 687 employees during the operation, which occurred over three months last year. Ninety-four breaches of minimum employment standards were found.
Some employers immediately addressed the breaches but 20 improvement notices and six warnings were issued. Two of the notices each included $1000 fines.
Labour Inspectorate regional manager Kevin Finnegan said there was no excuse.
"Almost all of the employers found in breach were using migrant labour, which is concerning because these are vulnerable people who may not fully know their rights and entitlements."
Mr Finnegan said significant arrears were uncovered with one employer owing more than $25,000 to their employees, and it was likely the lack of records was disguising more widespread noncompliance with minimum wage.
He said the breaches were disappointing but not surprising "as it's an issue we've raised with the industry for a number of years".
"As an industry with high growth and an increasing demand for migrant labour, it's important these issues are tackled now, as little or no action will only allow the problem to grow.
"These kinds of cases have the potential to damage New Zealand's reputation as fair and equitable, which is important with consumers increasingly demanding products are ethically sourced."
NZKGI chief executive Nikki Johnson said worker's welfare was paramount and the breaches were disappointing and unacceptable.
The group would work with industry stakeholders to act decisively and changes were already being made, she said.
From next season all orchard contractors and growers will be assessed and monitored by a worldwide standard or good agricultural practice. The group also commissioned research to better understand labour practices in the industry.
"While significant improvements have been made, there is still work to be done. NZKGI leads a broad sector approach working alongside government organisations to ensure compliance of all employers in New Zealand's kiwifruit industry."
The Ministry of Business, Innovation and Employment encouraged anyone concerned about their employment situation, or the situation of someone they know, to call the contact centre on 0800 20 90 20 where their concerns will be handled in a safe environment.