The Employment Relations Authority (ERA) has fined a North Island forestry company $35,000 for paying less than minimum wage and banned it from hiring migrants.

The ERA found Silviculture Solutions Ltd (SSL) used "an illegal system of calculating pay", where the workers were paid only for what the company deemed "productive hours".

The company was prosecuted after an audit of 10 silviculture businesses in the central North Island by the Labour Inspectorate in 2016.

"The four workers received between $241-$4,846 below their minimum wage entitlement, for more than a year," the Labour Inspectorate's Kevin Finnegan said.


"The penalties automatically place SSL on the Immigration Stand Down List, preventing them from hiring migrant workers for 18 months.

"Instead of paying the workers what they were legally entitled, SSL paid them for what they deemed 'productive hours' only – which the company calculated as the amount of trees needed to be pruned or planted, divided by the expected hours to do them."

The determination was limited to underpayments of the four identified workers, but the ERA also determined the company benefited by as much as $1.6 million over six years, as SSL's own accountant identified.

"What would have made it more difficult on these workers was that about half of SSL's workforce usually comprised of migrant staff on 'tied' visas, meaning their visas allowed them to only work for SSL," Finnegan said.

"Fear can dissuade workers from coming forward in these situations.

"But the Inspectorate encourages anyone who has information about minimum standards not being met to phone the MBIE's service centre, where calls will be handled in a confidential manner, on 0800 209020."

SSL is a subsidiary of CNI Forest Management Limited, based in Rotorua, and employs up to 250 staff in forestry block growing and maintenance.