28 February 2024

Restaurant owner ordered to pay $40,000 for unlawful wage deductions

A Rangiora restaurant and its owner who unlawfully deducted money from a former employee’s wages and breached other minimum employment standards, must pay the employee more than $40,000 in arrears and penalties.

The order was made by the Employment Relations Authority (ERA) in a recent determination. This follows an earlier Labour Inspectorate investigation into the matter.

Businessman Vijay Singh, the sole shareholder and director of Laxmi Narayan Restaurant Ltd, trading as Karfa Moroccan Cuisine, was also ordered to pay a further $11,250 in penalties to the Crown.

He was found to have unlawfully deducted money from his restaurant manager’s wages over a two-year period, underpaid him, failed to pay him for holidays and leave, and under recorded the hours the employee worked in exchange for having helped him obtain a work visa.

This resulted in the employee regularly receiving payment for fewer hours than he had worked and he was working up to 25 hours a week for which he wasn’t being paid.

Karfa Moroccan Cuisine
Company was penalised for breaches of employment standards

The ERA ordered Laxmi Narayan Restaurant Ltd to pay the employee minimum wage arrears of $19,320.53, unlawful deductions of $3,865.79, holiday and leave arrears of $3,674.07 and interest of $2,019.27.

According to the ERA determination, Laxmi Narayan Restaurant Ltd was also ordered to pay penalties of $17,000 while Singh must pay a penalty of $5,500. Half the penalty amounts are to be paid to the employee and the other half to the Crown. If Laxmi Narayan Restaurant Ltd is unable to pay, owner Singh is liable for both amounts.

Simon Humphries, Head of Compliance and Enforcement, Labour Inspectorate, said this determination, that Laxmi Narayan Restaurant and Singh must pay money unlawfully deducted from the employee’s wages, sends a strong message that “it is unacceptable and where appropriate we will ensure enforcement will be pursued.

“Unfortunately, there are employers who abuse the visa process…Some employers also illegally deduct money from the employee’s wages to circumvent the contractual agreement made during the visa approval process.”

In the Laxmi Narayan Restaurant Ltd case, the ERA ordered payment of arrears for the full difference of what was promised during the visa approval process and what was eventually paid.

The employee was paid for 34 hours at the contractual rate but was working up to 60 hours a week, being paid well under the minimum wage and significantly less than what had been agreed.

In making the payment order and imposing the penalties on Singh, the ERA found that the impact of these breaches had been significant on the employee.

It is understood that Karfa Moroccan Cuisine is now permanently closed, and website also taken down.

Anyone who suspects they may be a victim of migrant exploitation or are suspicious of potential migrant exploitation happening, can call Employment New Zealand’s free number 0800 200 088.

Read more related stories here: https://www.newsviews.co.nz/category/immigration/

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