30 Mar 2016

Thousands affected by payroll problems

5:49 pm on 30 March 2016

Investigations carried out by the Labour Inspectorate have revealed about 24,000 public and private sector workers have been underpaid due to breaches of the Holidays Act.

Meanwhile, Minister for Novopay Steven Joyce is flagging more potential problems with the school payroll system.

New Zealand money.

Photo: RNZ / Alexander Robertson

Mr Joyce said payroll problems could be spread across both public agencies and private sector companies.

Earlier this month, the States Services confirmed the police and the Ministry of Business, Innovation and Employment (MBIE) had significant problems with their payroll.

Today, the Labour Inspectorate confirmed it had completed 20 investigations.

So far, wages for about 24,000 employees have been found to have been underpaid, ranging from $70 per person to $1800 per person.

300714. Photo Diego Opatowski / RNZ. Steven Joyce  during a press conference regarding Novopay next steps.

Minister for Novopay Steven Joyce Photo: RNZ / Diego Opatowski

Mr Joyce, who is the minister in charge of both Novopay and MBIE, said the complaints from the private sector showed it could be a broad problem.

"Well it could be a hassle and I think they've got to meet their obligations, at the same time we do need to understand this is obviously very difficult for a number of operators," he said.

"I understand in all cases it is quite a small amount per person but it does need to be done correctly, which is why we are working [at] it with government agencies as well."

Government-owned company Education Payroll Limited (EPL) was set up to take over payroll system Novopay, after the debacle with the payroll for teachers and support staff under Talent 2.

Mr Joyce said EPL was now checking for potential problems.

"Every agency, I understand, is reviewing its holiday pay calculations in light of what MBIE and police, prior to that, found.

"EPL are looking at theirs at the moment and they're keeping me updated, and they are going to tell me if they think there is a significant issue.

"They're worried enough to have a look at it, absolutely."

Labour economic development spokesperson David Clark said the government had been far too slow to respond to the problem.

"Well I think there's a serious issue here. MBIE has known about this issue for six years since 2010 and they've done nothing about it.

"Now we learn that there is major failure going on, and Kiwis could be owed tens or hundreds of millions of dollars because of the government's failure to ensure that the law is applied fairly."

The Labour Inspectorate said it would now carry out targeted investigations.

It said employers with employees working different shifts and hours each week had to be much more diligent about recording those hours correctly, and making sure people were being paid correctly.