Exploitation of Migrant Workers: Southland Dairy Farm Pays $215,000 in Penalties

Why This Case Matters: Key Lessons for Employers

Risk of Migrant Worker Exploitation

This case highlights how migrant workers—especially in rural, seasonal or remote work contexts—can be at heightened risk of exploitation due to factors such as language barriers, unfamiliarity with employment law, isolation and reliance on employer-provided housing or visas. The ERA explicitly found a “clear imbalance of power” in this employer-worker relationship.

Importance of Accurate Employment Documentation

The manipulation of employment agreements and payslips in this case underscores the critical importance of:

• Ensuring the correct salary is stated and paid.

• Maintaining honest, consistent records.

• Avoiding dual agreements or back-dated documents. The ERA considered those actions as deliberately misleading regulatory authorities.

Minimum Wage, Holiday and Leave Obligations

Even when workers are employed on “salary” rather than hourly pay, employers must ensure that the overall remuneration meets or exceeds minimum wage thresholds. Also pay holiday, annual leave and other entitlements correctly. Failure to do so is a clear breach.

Risk of Serious Penalties and Reputational Damage

A penalty of NZ$215,000 is significant—especially for a single employer in the agriculture sector. Furthermore, the fact that this case has been widely reported means reputational risk as well as regulatory risk. Employers must not treat employment compliance as a “tick-box” exercise; serious consequences await.

Emerging Criminalisation of Wage Theft

While this case was civil (employment standards) rather than criminal, it comes at a time when New Zealand’s law is changing. The article “Wage Theft Becomes Criminal Offence: What NZ farmers need to know” notes that intentional under-payment by employers is now legally classified as theft under the Crimes (Theft by Employer) Amendment Act 2025.

Employers in sectors like agriculture should take note: what was once a labour standards matter is increasingly subject to criminal sanctions, and cases like RPL/Abdul-Jabbar show how vigilance is required.

 

Practical Steps for Dairy Farms & Rural Employers

To avoid falling into the same pitfalls, employers should consider the following compliance checklist:

• Review all employment agreements to ensure the salary, hours, entitlements and job description reflect actual working conditions.

• Ensure remuneration meets minimum wage even when staff are salaried—regularly check salary vs hours worked.

• Maintain accurate time and wage records (both payslips, payment records, leave taken) for at least six years.

• Avoid unlawful deductions such as making workers pay recruitment fees, or expecting payments from wages without legal basis.

• Ensure migrant worker rights are respected, including safe working conditions, access to leave, correct pay, freedom from passport/ID retention.

• Be wary of dual contracts or inflated salary figures submitted to immigration authorities, as these may lead to findings of deliberate deception.

• Regularly audit payroll and HR systems, especially in rural or remote contexts where management oversight may be lighter.

• Seek legal advice if you employ seasonal or migrant workers, or if you have complex arrangements (such as variable hours, farm-based “salary” roles, accommodation provided).