The man suffered multiple crush injuries to his left leg and pelvis, of which his leg had to be amputated.
Danielle Henry, WorkSafe's Area Manager, said an investigation found the machine being used by the victim was not adequately guarded.
"D & H Steel's failure to ensure the machine was adequately guarded meant workers were exposed to unguarded trapping points, crushing points and moving parts, leading to a risk of entanglement.
"Our investigation found workers were routinely required to access the machine's operating area to adjust or replace drill bits or repair faults, while the machine was electronically locked out. However, there was inadequate guarding in place to prevent the worker from accessing the operating area if the machines automatic lockout failed."
Henry said the company should have ensured workers weren't able to reach dangerous moving parts.
"At any business where workers are required to operate machinery, it's imperative that the correct machine guarding is in place to ensure moving parts are separated from people."
D & H Steel Construction was sentenced under sections 36(1)(a), 48(1) and (2)(c) of the Health and Safety at Work Act 2015.
D&H Steel Construction has constructed hundreds of building structures, with involvement in Westfield-Riccarton in Christchurch, Viaduct Event Centre in Auckland and the Auckland hospital parking building.
In a statement, D&H Steel said it had taken "full responsibility" for the incident.
"D&H Steel deeply regrets that this accident occurred. We apologise unreservedly to the injured man and his whānau, and to our staff, for the distress the accident has caused," said General Manager Wayne Carson.
D&H Steel had provided the injured man "with as much support as possible and has remained in frequent contact with him throughout his recovery". Several of D&H Steel's team visited the man in hospital, including Carson. The visits and offers of support continued once the man returned home.
"D&H Steel is also committed to employing him in a role with opportunities to grow and develop a fulfilling career in our industry. We are currently training him, and teaching him new skills to take on a new and rewarding job in the business," Carson said.
"We regret that this accident was able to occur and we have done everything we can to avoid another similar incident happening again."We have taken considerable steps to protect our staff and visitors at our workplace, and have spent more than $400,000 on safety initiatives."
Voluntary payments totalling $172,000 were paid by D&H Steel to the injured man prior to the court sentencing. This is more than WorkSafe sought through the sentencing process.