Regulators uncovered breaches of minimum employment standards, as well as cash wage payments and poor record-keeping. Video / MBIE
A Government crackdown on construction companies across the North Island has uncovered breaches of minimum employment standards, cash wage payments and poor record-keeping.
Evidence of unlawful activity and non-compliance was discovered at “several” companies among 147 construction businesses checked in relation to employment, immigration, company and tenancy laws, the Ministryof Business, Innovation and Employment said in a statement.
Regulators joined forces for the Operation Rimu compliance blitz, with teams from the ministry’s Labour Inspectorate involved, as well as Immigration Compliance and Investigations’ staff, and with Tenancy Services and the Companies Office workers on standby.
Site visits took place at businesses in Napier, Morrinsville, Pōkeno, Wellington, Tauranga, New Plymouth, Hamilton and all parts of the Auckland metro area, the ministry said.
“Early findings were that there was evidence at several companies of breaches of minimum employment standards, cash wage payments and poor record-keeping.”
Information collected during the operation was now being reviewed before any details about specific issues, or potential enforcement action, could be made public, it said.
Labour inspectors pictured during Operation Rimu, a large, co-ordinated crackdown on North Island construction companies by regulators last week. Photo / MBIE
Construction company directors had reported being aware of cash-wage and other unlawful practices in the sector, Labour Inspectorate boss Simon Humphries said.
“They said there were whispers in the industry, particularly in Auckland residential construction, about instances of businesses being significantly undercut to a degree that raised suspicions about the legitimacy of competing contracts.”
Employment New Zealand received 516 complaints about the construction sector last year, Labour Inspectorate head Simon Humphries says. Photo / MBIE
A thriving construction sector was vital for New Zealand’s economic growth and productivity, but it continued to be a high-risk area for non-compliance with industry regulations, including those around worker exploitation, he said.
Employment New Zealand received 516 complaints about the construction sector last year, with just over half relating to Auckland.
“Working with our regulatory partners, we know organised crime groups are exploiting weaknesses in the sector to launder money and exploit workers, setting up businesses in ways that undercut those operating legally and tilting the playing field against good, lawful business.”
Almost 150 construction businesses were checked in relation to employment, immigration, company and tenancy laws as part of Operation Rimu last week. Photo / MBIE
Operation Rimu also found examples of robust employment practices that met industry standards, and positive engagement with education as well, Humphries said.
“All enforcement options will be considered and, if applicable, used to ensure minimum employment standards are met.”
Other partners involved in an ongoing collaborative focus on the construction sector included police, he said.
Information collected during Operation Rimu - a crackdown on construction company compliance - is being reviewed before any details about specific issues – or potential enforcement action - can be made public, officials say. Photo / MBIE
Working with ministry regulators and other partners gave police a wider view of unlawful activity, made it easier to spot trends and weaknesses in the system, and allowed them to take quicker action, National Organised Crime Group director Detective Superintendent Greg Williams said.
“A key part of our approach also involves working with the industry to strengthen their processes and help put a stop to exploitation in the system.”
