The hospitality industry in New Zealand has a significant wage theft culture, an employment law expert says.

There are not any formal statistics measuring the issue however Dawn Duncan, Lecturer at the Otago faculty of Law, believes it is common in New Zealand hospitality.

"The industry itself has got into a practice of [wage theft] being almost normal, which means good employers are at a bit of a disadvantage. If you are paying people well in wages you are still competing with organisations that are not paying out those wages," she said.

Wage theft is when an employer steals from their workers. This can be a boss not paying wages or overtime, waiters charged for table walkouts or broken glasses, unpaid holiday pay, KiwiSaver or tax, the withholding of staff tips or docking breaks that were never taken.

Advertisement

A cafe in Waikato allegedly stole wages from staff in August this year. After closing down, the employer "disappeared" without notice.

An employee, who asked not to be named out of concern it would affect her job prospects, said she was owed 32 hours' wages on top of unpaid holiday pay. Her boss had also deducted KiwiSaver and tax from her wages for the past two months but they had not been paid out.

"She blocked us all on Facebook, on Instagram, blocked us from the shop Facebook page, changed her phone number, changed her email. She ghosted us all," said the worker.

In the aftermath she sought legal advice and was shocked at how complex the process was. She believed this was a significant deterrent for others who had been victims of wage theft.

"I needed to do a lot of research to try and understand my rights as an employee, Google things to see what parts were appropriate for my case... I was lucky someone could help me."

Audits in Australia last year found 72 per cent of hospitality businesses breached workplace laws, owing just under half a million dollars to workers, The Guardian has reported.

"The reason it's still happening is because people aren't complying with the law, so it's a non-compliance issue more than it is the law being vague," Duncan said.

Hospitality is a "focus area" for the Ministry of Business, Innovation and Employment, said David Milne, regional manager Labour Inspectorate.

Advertisement

The number of Labour Inspectorates in New Zealand had increased from 60 to the current figure of 71 after a funding boost in Budget 2018.

Milne said the Labour Inspectorate takes a "proactive and intelligence-led approach", which targets employers in the industry who deliberately breach standards by exploiting workers.

"Industries that rely on low-paid, unskilled, temporary and seasonal labour, and those that employ a large proportion of migrants and youth, are at a higher risk of breaching employment standards."

Sam Jones, the industry co-ordinator at E tū union, said they are unable to do more to protect workers as the union was not resourced to tackle such a big industry.

"What it comes down to is the legislation in New Zealand isn't enforced widely enough, whether it's by the labour inspectorate not being resourced properly or unions not having the resources," he said.

The average waiter in New Zealand earns $2 less than the living wage, making it low-income work.

Grand Central bar on Ponsonby Rd is able to pay its 10 staff a living wage. Dan Buchanan, who owns the bar with his wife, said the choice to pay their workers fairly came from understanding how difficult it could be to get by. Buchanan had worked in the industry for 25 years.

"We know from our own struggles, we are a family of five. We know how hard it is even just to pay rent," said Buchanan.

Employees start work at Grand Central on a minimum of $21.15, the living wage. At this pay rate he said it was easy for them to pick up staff from other establishments as so many workers had been underpaid previously.

"If you own a business and you are paying a person to do the job you don't want to do, then you should pay them a lot," says Buchanan.

The Minimum Wage Act (1983) and the Wages Protection act (1983) are designed to keep workers safe from exploitation. The Wages Protection Act is legislation that stops employers making "unlawful and unreasonable" deductions from staff wages.

The penalty for violating employment law depends on the seriousness of the breach, how many people are affected and how much money is involved. Violations of the protection acts are not criminally prosecuted.

Chloe Ann-King is the founder of "Raise the Bar" advocacy group, a movement working to build awareness of wage theft in hospitality. She finds the routine reference to hospitality work as unskilled "deeply offensive and out of touch".

The "grassroots" movement would love to see wage theft become a criminal offence - a punishment Ann-King feels more accurately reflects the severity of the crime.

"We want to change legislation, we want to make sure wage theft is a criminal offence in New Zealand. We want employers to know they cannot steal off their workers and get away with it anymore."