By Claire Mansell - 14 Feb 2013
Employees agree to work for some kind of payment - be it wages,
salary, or commission. This year's Waitangi Day repeat of the
on-going Novopay saga shows how serious, and potentially
devastating, not getting paid can be. So what should you do
if your pay fails to arrive?
When and how wages should be paid
Employers must ensure that their employees are fully, and
fairly, paid. Employees must be paid on the day, and in the
intervals, agreed with the employer in the employment
agreement.
Legally, employers are required to pay wages in cash unless some
other form of payment is agreed to in the employment agreement
(which it usually is - the most common being payment by direct
credit).
What if your wages are not paid?
The first step for employees who have not been paid should be to
raise the issue with their employer as soon as possible. This is
going to be the quickest and easiest solution, especially if the
default is the result of an oversight or technical error.
If the employer fails to remedy the situation then a Labour
Inspector from the Department of Labour can help. Labour Inspectors
investigate complaints about possible breaches of minimum
entitlements and can issue demand notices requiring an employer to
comply with their legal obligations in relation to payments to
employees.
Alternatively, employees may seek mediation of the problem in
the Employment Relations Authority. Mediation is free, confidential
and available to any employee or employer with an employment
relations problem.
To be referred to a Labour Inspector, or to seek mediation, go
to the Department of Labour's website (http://www.dol.govt.nz/) or call 0800 20 90
20.
If the matter doesn't resolve at mediation, the Authority has
the discretion to order not only payment of any money owed but also
interest and legal costs. If the breach is deliberate or sustained,
a penalty not exceeding $10,000 (if the employer is an individual)
or $20,000 (if the employer is a company) may also be awarded.
A penalty is unlikely to be imposed if the default is
inadvertent or a technical error.
Third party problems
Many employers now use outside payroll systems to take care of
paying their employees. If something goes wrong with the payroll
then the above position is unlikely to be any different.
This is because the responsibility to pay employees stays with
the employer notwithstanding the fact they may have delegated the
actual task to the payroll system.
The employer may be able to recover damages from the payroll
system provider, but their obligation to pay their employees
remains the same.
*Bob Dylan, It's Alright Ma (I'm Only
Bleeding)
Contacts
Claire Mansell