The Court of Appeal in Wellington has reserved its decision on whether care workers should be paid for sleepovers.
IHC Idea Services is appealing against a benchmark employment court decision from last July which would have required it to pay more than $170 million in back pay.
Justices Chambers and Randerson have said the court must decide whether what the parties agreed was work can be allowed to override the minimum wage act.
IHC lawyer Kit Toogood, QC, told the court that under the law, work is defined as requring either physical or mental effort, and sleeping is not working.
If workers have to get up in the night they get paid for that time, and if not they get an allowance of $34 to compensate them for the inconvenience, he said.
But the lawyer for the Service and Food Workers Union, Peter Cranney, told the court that definition of work is too simplistic.
"It's quite obvious that work includes long periods of time which do not include, or do not necessarily include, physical or mental effort. It doesn't mean that the minimum age act doesn't apply."
Mr Cranney said caregivers doing sleepovers are working because they are at the complete disposal of the employer and they can not leave.
He says if the court accepts IHC's argument, it would be like saying shop assistants should only get paid for the time they are actually serving customers.
The judges have reserved their decision.