Labour inspectorate issues warning to employers

by |
The results of a nationwide investigation have prompted the labour inspectorate to issue an important reminder to employers – just because you call someone a volunteer doesn’t make it so.

“Businesses cannot evade their obligations as employers by calling their workers volunteers and then simply rewarding them with a bed in a dormitory, food and Wi-Fi rather than a fair wage,” says labour inspectorate general manager George Mason.

According to Mason, the practice is most concentrated in the accommodation industry where employers have amenities on hand as well as a steady stream of overseas visitors who are often satisfied with the temporary arrangement.

However, Mason says the practice is unfair to businesses that do follow the law by paying their employees and is exploitative of overseas workers who may not necessarily know any better.

“It damages the prospects of people seeking employment in the industry and also takes advantage of the good nature of travellers who may not know what their employment rights are,” he says.

To add to that, the arrangements could also be in breach of immigration laws which require that work is performed only by those lawfully entitled to work in New Zealand.

Now, the inspectorate has offered clarification to employers so they can easily discern their workers and volunteers with confidence.

“Key indications that a worker should be regarded as an employee rather than a volunteer include being paid or rewarded for their work, that the worker expects to be rewarded, that the business is making an economic gain from their work, the work is integral to the business, and the workers hours are controlled,” says Mason.

“When you take a closer look at some of these schemes where businesses have workers putting in as many as 32 hours per week cleaning linen, working reception, and vacuuming, many of them are blatantly employment relationships and they are taking advantage of these workers.”

Wherever a worker is being rewarded in a business at whatever level, the labour inspectorate’s starting position is that these people are employees and minimum employment standards apply.

“This means providing clear documentation for these workers, with written employment agreements, accommodation agreements, keeping wage and time records, paying wages in money, and paying tax,” says Mason.

According to Mason, it is perfectly legal for businesses to reasonable accommodation costs from a worker’s wages but the agreement must be in writing and accommodation arrangements need to be treated separately from employment.

“With clear documentation, exploitative practices will be exposed and these workers will be afforded the protection of New Zealand employment law – preserving the reputation of New Zealand as a fair and equitable place to work,” says Mason. “It will also ensure legitimate businesses are not undermined.”

The inspectorate’s initial investigation was launched following complaints about businesses exploiting schemes such as Willing Workers on Organic Farms (WWOOFing) and VolunteerX – where travellers take on work in exchange for accommodation. However, Mason acknowledged the practice wasn’t restricted to the accommodation industry.

“While our initial focus has been on working with the accommodation industry, we understand there are other businesses that may be using volunteers in such a fashion,” he said.

“We encourage all businesses that are currently rewarding labour other than by payment of wages to read our position statement, and where necessary, change their employment practices so they can demonstrate they are meeting their legal obligations.”

Recent stories:

No silver bullet, says top HR head

Bill English talks HR in opening address

Why HR is critical in cybersecurity
 
 
 
 
 
 

HRD Forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions