Investigations into an Indian restaurant chain allegedly paying its staff less than $4 an hour has resulted in an action being filed with the Employment Relations Authority after the owners failed to meet the demands of labour inspectors.

Ministry of Business Innovation and Employment spokesman Britton Broun said the ministry could not comment on the name of the restaurant chain because the case was now before the authority.

The action was lodged after the business owners failed to meet the deadline to provide the ministry's labour inspectorate with wages and time records, holiday and leave records and employment agreements, which are required to be kept by law, for around 100 staff across the chain.

The inspectorate and Immigration New Zealand carried out a joint compliance operation after receiving a number of complaints from workers.


Allegations include that workers were not being paid any entitlements, such as holiday pay and sick leave, overcrowding conditions in accommodation provided for workers and illegal wage deductions for the accommodation.

Workers were also allegedly paid around $265 a week for working up to 70 hours, which amounted to less than $4 an hour.

Some staff were also allegedly asked to pay between $10,000 and $20,000 to remain in their jobs while they secure permanent residence.

The ministry said 15 companies were associated with the restaurant chain, and each faced a maximum penalty of $20,000 for each failure to comply under the Employment Relations Act.

Two staff members, working for the chain, told the Herald labour inspectors had quizzed them about their wages and working conditions.

"We are worried about what will happen to our visa applications if the restaurant is found to have done something wrong," one said.

He said restaurant outlets had sponsored several workers for permanent residence, including a few of its managers, who were mainly former international students who needed work to obtain residency.

Inspectorate northern manager David Milne said the ERA action was a first step and further enforcement action was likely to follow if breaches were found to have occurred.

This could include improvement or demand notices, financial penalties or court action.

"By breaking the law, these businesses gain an unfair advantage over their competitors," Mr Milne said. "The exploitation of workers is not welcome and breaches New Zealand law."

The chain could not be reached for comments, and did not return the Herald's calls yesterday.

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