New Zealand Metropolitan Trotting Club fined $10,000 for underpaying staff

A Labour Inspectorate investigation found the Trotting Club had failed to pay more than 50 employees their correct holiday pay. Photo / File

The New Zealand Metropolitan Trotting Club has been fined $10,000 by the Employment Relations Authority (ERA) for breaching the Holidays Act.

A Labour Inspectorate investigation found the club had failed to pay more than 50 employees their correct holiday pay and had set up its payroll system in a way that resulted in non-compliance with the Holidays Act.

Jeanie Borsboom, Labour Inspectorate regional manager, said the ERA's decision sends a clear message to employers about their obligations as employers.

"This is a clear message to employers that the Labour Inspectorate expects employers to actively engage with their obligations as employers. A failure to do so will result in serious penalties," Borsboom said.

"The trotting club was originally issued with an improvement notice which gave it an opportunity to make necessary improvements and pay staff without a penalty being applied.

"However, the trotting club refused to cooperate and only did so once compliance action was commenced in the ERA by the Inspectorate."

But trotting club chief executive Peter Jensen said it is unfortunate that the Labour Inspectorate had chosen to characterise what it says is "sending a message to employers" as a criticism of the club's actions.

"Like many local employers, including MBIE themselves, the club has been caught up in the notoriously difficult Holidays Act payroll calculation issue.

"This came about because we – again, like many others – chose to rely on a reputable provider of payroll software to correctly set up the payroll system to calculate holiday pay entitlements.

"When we became aware of the situation, we took steps to review and remedy our systems, and at every stage we cooperated with the Inspectorate," Jensen said.

The trotting club said the affected staff – many of whom were owed less than $50 – have been paid their entitlements.

Borsboom said employers need to carefully assess whether any payroll system used is capable of complying with the Holidays Act and that their business systems continue to support that.

"Reliance on an electronic system alone with a 'set and forget' attitude will almost certainly result in non-compliance and risk penalties," she said.