Intentionally Withholding Wages? Prison Pages.

The Crimes (Theft by Employer) Amendment Act 2025 (“the Act”) came into force on 14 March 2025 and criminalises employer non-payment of employee entitlements in certain circumstances.

The implications and consequences? Employers found to have intentionally withheld any wages owed to an employee in relation to their employment without a reasonable excuse may now face criminal liability.

What constitutes ”money”? The Act refers to money owed to an employee under an employment agreement (regardless of whether the agreement is in writing) or under an Act (such as the Holidays Act 2003, the Minimum Wage Act 1983 or the Wages Protection Act 1983). This includes wages, salaries, and other monetary entitlements (e.g., holiday pay).

Before the Act came into force, failing to pay an employee was still unlawful and amounted to a breach of a number of existing employment-related statutes. An aggrieved employee or the Labour Inspectorate could file proceedings in the Employment Relations Authority, and if successful, the employer could be liable for penalties compliance-based remedies. That avenue still exists.

However, now, employers will also face potential liability if the breach is held to have occurred in the context of intentional non-payment and without a reasonable excuse. If an employer is found to have committed theft:

· And the employer is an individual, the maximum penalty is one year’s imprisonment, a $5,000 fine, or both;

· In any other case, the maximum penalty is a $30,000 fine.

The broad focus of the Act is directed toward mitigating the exploitation of employees. The rationale for its introduction was due to offences relating to theft by a person in a special relationship being insufficient to account for wage theft by employers, processes being too complex, and potentially deterring any victims of wage theft from seeking the appropriate reparation/accountability.

While we have recently seen proposed changes to employment-related legislation being more “employer-friendly”, this Act clearly favours employees. National and ACT opposed the Bill, however support from New Zealand First meant the Bill passed into law.

It remains to be seen how the Act will play out in practice, including how common it will be to see cases being brought in this context. However, we will be keeping a close eye on this law, and employers should take the time to ensure their systems and processes (think payroll, time and wage records, holiday and leave records, and approach to deductions) are compliant and up to date, and if not, take action to remedy any non-compliance.

 

For more information

If you would like further information about any employment matters please reach out to Tess von Dadelszen, Partner of JB Morrison Lawyer’s employment law team, on 027 233 3895.

Tess von Dadelszen | 027 233 3895 | 04 495 8920 | tess.vondadelszen@jbmorrison.com

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A closeup of a hand, hovering over an invoice or payment slip. There is a laptop next to it. Suggestion of an employer intentionally withholding wages.