Paying employees correctly is a legal obligation and non-compliance will expose an employer to serious legal implications, including things like penalty orders, stand-down orders (preventing the hiring of migrant workers), banning orders (stopping people involved in serious breaches from being involved in business, or employing staff, which can essentially end their business) and in some cases criminal prosecution, including terms of imprisonment.

New Zealand’s Wage Protection Regime strictly limits when and how employers can make deductions from wages, and recent legislative change has significantly increased the
consequences of getting it wrong. This area of employment law is heavily regulated and not well understood by kiwi businesses – particularly smaller employers. The Wages Protection Act 1983, the Employment Relations Act 2000, and related minimum entitlement legislation such as the Holidays Act 2003, work together to ensure employees receive
their wages in full unless a lawful deduction applies. Employers can face heavy legal scrutiny and sanctions where they do not comply with the law, irrespective of whether such breaches were deliberate, or unintended.

Failure to comply with minimum code legal entitlements can result in arrears, penalties, personal grievances, and following recent reform criminal liability under the Crimes (Theft by Employer) Amendment Act 2025.