Are dairy farm­ers break­ing the law?

South Waikato News - - RURAL DELIVERY - By EMMA MILES

In Novem­ber 2013 the Min­istry of Busi­ness, In­no­va­tion and Em­ploy­ment (MBIE) warned that farms were about to be vis­ited to check their com­pli­ance with min­i­mum em­ploy­ment rights.

At that point the labour in­spec­tors had al­ready be­gun vis­it­ing dairy farms in South­land but in 2014 are now set to in­spect Waikato, Hawke’s Bay and Taranaki.

The news will be likely to force a sweat from even the most ef­fi­cient em­ployer.

What are the in­spec­tors look­ing for? Their pri­mary fo­cus is to check on a prac­tice called sea­sonal av­er­ag­ing, the av­er­ag­ing of pay across a sea­son; a rel­a­tively com­mon prac­tice on many farms.

The ar­gu­ment for it is that it smooths out in­come for farm em­ploy­ees so they have a de­pend­able pay when work is low.

Al­though it sounds like a good deal for em­ployer and em­ployee, it be­comes prob­lem­atic when an em­ployee is on a low salary as they can end up be­ing paid less than the min­i­mum wage.

In Septem­ber 2013 a Strat­ford farmer was or­dered by the Em­ploy­ment Re­la­tions Author­ity to pay his worker more than $6000 in back pay, af­ter the MBIE Labour In­spec­torate iden­ti­fied breaches of min­i­mum em­ploy­ment rights.

The em­ployer was found to have been pay­ing be­low the min­i­mum wage when the em­ployee’s pay was av­er­aged across sea­sons.

The em­ployee had been a farm as­sis­tant from Novem­ber 2, 2010 to Oc­to­ber 19, 2012 and to­wards the end of his em­ploy­ment had lodged a com­plaint with the MBIE con­cern­ing his rate of pay.

He had ini­tially been paid an an­nual salary of $30,000, which rose to $32,000 in April 2012. He worked 49-60 hours a week drop­ping to 38-44 hours a week in the dry sea­son.

The in­spec­torate found this breached the Min­i­mum Wage Act and a de­mand no­tice was is­sued to the farmer for $6473.77.

The farmer tried to raise the av­er­ag­ing out ar­gu­ment, fil­ing an ob­jec­tion on the ba­sis that the weekly wages paid un­der the min­i­mum wage should be off­set against wages paid dur­ing the dry sea­son.

The author­ity de­ter­mined that pay­ment by way of salary can­not be used as a mech­a­nism to avoid pay­ing a min­i­mum wage and any ar­rears will need to be paid.

The author­ity said that salary pay­ments ‘‘can­not be used as a mech­a­nism to avoid the rates set out in a Min­i­mum Wage Or­der’’.

If you want to en­sure you are com­ply­ing with em­ployer obli­ga­tions the best way is to keep ac­cu­rate wage records.

The gen­eral thought is if em­ploy­ers do not keep ac­cu­rate time and wage records it is dif­fi­cult to see how they can be meet­ing their obli­ga­tions for the pay­ment of pub­lic and other hol­i­days so fur­ther delv­ing will likely be the next step.

Ac­cu­rate de­tailed wage records are para­mount.

This un­der­stand­ably ap­plies to em­ploy­ees on hourly rates but also to those on salaries as they can be vul­ner­a­ble if they are work­ing long hours that do not equate to each hour, day or week paid, there­fore not al­ways meet­ing the min­i­mum wage.

It may have come as a

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