A restaurant and takeaway business operating in Auckland and Cromwell, together with its owner, has been ordered to pay $130,000 in penalties after the Employment Relations Authority found serious breaches of minimum employment standards affecting five former workers.

SSM Investments Limited was ordered to pay $90,000 in penalties, while its owner and sole director, Shazneen Shariza Khan, was ordered to pay a further $40,000.

The penalties come on top of $147,001 in wage arrears already ordered to be paid to the five workers.

The case followed a Labour Inspectorate investigation after complaints were made by employees working at the company’s Cromwell operation.

Employment Relations Authority member Philip Cheyne found the business had failed across several basic areas of employment law, including minimum wage obligations, leave entitlements, record keeping and lawful wage deductions.

He said the conduct undermined the trust and confidence expected in employment relationships and highlighted the imbalance of power that can exist between employers and vulnerable workers.

More than $147,000 owed to five workers

The five former employees were underpaid a combined $147,001.

Individual arrears ranged from more than $7,000 to over $78,500.

The breaches affected workers across both the Auckland and Cromwell operations.

According to the Authority’s findings, the business had:

  • failed to pay the minimum wage
  • failed to maintain accurate wage and time records
  • failed to keep proper holiday and leave records
  • failed to pay sick leave entitlements
  • failed to pay holiday and public holiday entitlements
  • made unlawful deductions from workers’ wages

Ms Khan was also found to have been personally involved in the breaches and was therefore held liable for penalties herself.

One worker was owed more than $78,500

The scale of the underpayment was particularly serious in at least one case.

Labour Inspectorate Investigations Manager for the Central and Southern regions, Taahera Begum, said one employee was owed more than $78,500.

That included about $49,000 in unpaid wages and a further $11,000 in unlawful deductions relating to rent, loans and other items.

The Labour Inspectorate described the offending as sustained and serious.

“These workers were reliant on their employer to meet basic minimum employment standards,” Begum said.

“Instead, they were underpaid, had unlawful deductions made from their wages and were denied lawful leave entitlements.”

Penalties sit on top of arrears

The financial consequences for the business and owner now extend well beyond the wages originally withheld.

Amount

Purpose

$147,001

Wage arrears owed to five workers

$90,000

Penalty against SSM Investments Limited

$40,000

Penalty against Shazneen Shariza Khan

$277,001

Combined arrears and penalties

The $147,001 owed to the workers has already been secured and paid.

Funds were protected after a freezing order was obtained in October 2025 and were held in trust before being distributed to the affected employees.

That step ensured the workers were not left waiting indefinitely for money the Authority had found they were owed.

Why the case matters

The case is significant because the breaches were not limited to one technical mistake or isolated payroll error.

They covered several core employment obligations over time.

Minimum wage requirements are among the most basic protections in New Zealand employment law.

Employers are also required to maintain proper records because those records allow workers, regulators and courts to establish whether people have actually been paid correctly.

When wage and time records are missing or inaccurate, workers can find it much harder to prove underpayment.

The same applies to leave records.

Holiday pay, sick leave and public holiday entitlements are not optional benefits provided at an employer’s discretion. They are legal entitlements.

The Authority highlighted the power imbalance

Cheyne’s comments are important because they go beyond the numbers involved.

He said the conduct demonstrated the inherent inequality of power in the employment relationship and undermined employment standards.

That is particularly relevant in cases involving workers who may depend heavily on their employer for income, accommodation, immigration status or future employment references.

Even where immigration status is not directly at issue, workers can be reluctant to challenge an employer if they fear losing shifts, hours or their job entirely.

That is one reason employment legislation places responsibility on employers to meet minimum standards regardless of whether a worker complains immediately.

Labour Inspectorate says the penalties should send a message

Begum said the outcome should serve as a warning to other employers.

“The penalties should send a clear message to employers that exploiting vulnerable workers will result in significant financial consequences.”

She said the breaches had caused unnecessary stress and hardship for the employees involved.

The Labour Inspectorate also made clear that enforcement action can extend beyond recovering unpaid wages.

Employers can face substantial penalties where breaches are serious, repeated or deliberate.

What employers should take from this case

For employers, the lessons are straightforward.

Payroll systems must be accurate.

Hours worked must be recorded.

Minimum wage obligations must be met.

Leave must be calculated correctly.

Deductions cannot simply be taken from wages without lawful authority.

And owners or directors who are personally involved in unlawful practices can face individual consequences.

The fact that a business operates in hospitality, agriculture, retail or any other sector does not change those obligations.

Nor does financial pressure excuse non-compliance.

What workers should know

For employees, the case is also a reminder that underpayment does not have to be accepted as normal.

Workers should keep their own records where possible, including:

  • hours worked
  • payslips
  • employment agreements
  • leave taken
  • bank payments
  • messages or emails about shifts
  • any deductions made from wages

Those records can become important if there is later a dispute.

Workers who believe they are being underpaid can contact Employment New Zealand or the Labour Inspectorate for guidance.

The larger lesson is that basic employment rights apply regardless of whether someone is new to New Zealand, working temporarily, in a low-paid job or dependent on an employer for opportunities.

Hospitality remains a high-risk area

The restaurant and takeaway sector has repeatedly attracted attention from employment regulators because of issues including long working hours, variable rosters, informal arrangements and workers who may be reluctant to challenge management.

That does not mean the sector as a whole is non-compliant.

Most businesses meet their obligations.

But where poor practices occur, they can affect several different employment standards at once.

That appears to have been the case here.

The Authority’s findings covered wages, records, leave and deductions rather than one narrow issue.

Personal liability matters

One of the most important aspects of the case is that the penalties were not imposed solely on the company.

Ms Khan was personally ordered to pay $40,000.

That sends a wider message to business owners and directors.

Operating through a company does not necessarily protect an individual from consequences if they are personally involved in breaches of employment law.

Where regulators can establish that a director, owner or manager was directly involved, personal liability may follow.

Enforcement is about more than punishment

The purpose of cases like this is not simply to impose a large financial penalty.

They also reinforce the minimum standards expected across the labour market.

If businesses that underpay staff gain a cost advantage over competitors who follow the rules, compliant employers are also harmed.

That is why enforcement protects more than the workers directly involved.

It helps maintain a level playing field for businesses that pay staff properly and meet their obligations.

A clear message from the case

The numbers in this case are substantial.

Five workers were collectively owed more than $147,000.

The company and its owner were then ordered to pay another $130,000 in penalties.

But the deeper issue is simpler.

Workers are entitled to be paid correctly, to receive lawful leave, and to have their wages protected from improper deductions.

Businesses that ignore those obligations can face consequences well beyond simply repaying what should have been paid in the first place.

For employers, the message is to get the basics right.

For workers, the message is that minimum employment standards are enforceable.

And for the wider hospitality sector, the case is another reminder that exploitation can become extremely expensive once regulators and the Employment Relations Authority become involved.

Source: Labour Inspectorate / Employment New Zealand media release, 3 September 2026.