Crimes (Theft by Employer) Amendment Bill

Can my employer withhold my wages?

Employment relationships can be tricky at times, particularly when it comes to payment. As many of you may be aware, it can be difficult to understand what is and isn’t allowed when it comes to deductions being made from your pay due to overpayment of wages, failure to give notice etc. What many don’t know is that there are almost no circumstance where the withholding of wages or minimum entitlements is justified under New Zealand employment law.

Who drafted this bill and what does it do?

After his own negative experience, Labour list MP Ibrahim Omer has drafted The Crimes (Theft by Employer) Amendment Bill. This Bill was drawn from the Member’s Ballot in April and could result in more severe consequences for employers who intentionally withhold wages from their employees.

The Bill applies to any person who employs another person and is required to pay money owed in relation to the employment under an employment agreement (whether or not the agreement is in writing), or as otherwise required under law e.g. minimum entitlements. If the employer intentionally fails to pay the money owing to their employee, they have committed theft under the Crimes Act 1961.

If this Bill is passed and the employer is an individual, they may liable to imprisonment for a term not exceeding 1 year, a fine not exceeding $5,000, or both. In any other case, the employer may be liable to a fine not exceeding $30,000.

The intention behind this Bill is to discourage employers from stealing wages and to ensure that those who do are held accountable. It is said that the existing processes are too complex and this results in many employees never reclaiming their wages, with no consequences for their employers.

 

Does this benefit employees?

It is true that the current processes around reclaiming wages may be complex in some cases. However, in any situation where an employer is intentionally withholding monies owed to the employee, a personal grievance can be raised and compensation sought. The Employment jurisdiction tends to focus on the monetary element as a compensatory measure for harm done to the employee. Would this be the same in the criminal jurisdiction should the Bill pass?

Overall, it is unclear whether this Bill is intended to replace current systems or to ultimately offer another avenue for employees so that even if they can’t recoup their wages, they may still receive some kind of justice. It may also make it clearer to both employees and employers that there is no justifiable reason to withhold wages and that doing so may result in severe penalties for the employer.

In any event, this Bill does pose some interesting questions and perhaps brings attention to an area of the law that is not currently being addressed appropriately. It will be interesting to follow further discussions around this Bill and what Parliament will make of these new sanctions on employers. What do you think?

 

Published on Thursday, June 8th, 2023, under Blog