The Ministry of Business, Innovation and Employment is taking action against a restaurant chain in Auckland after complaints its employees are being paid less than $4 per hour.
The ministry said on Wednesday that 15 companies linked to the chain were being investigated after workers complained about their pay.
It has filed an action with the Employment Relations Authority against the business after it failed to meet a deadline to provide employment agreements and other records for about 100 employees.
Labour Inspectorate northern manager David Milne said it received complaints that the employees were being paid about $265 per week for up to 70 hours work, less than $4 per hour.
Mr Milne said the ministry is seeking penalties and the 15 companies could individually face a maximum penalty of $20,000 for each failure to comply under the Employment Relations Act.
The First Union said on Wednesday it is confident that the case involves the exploitation of Indian migrant workers.
General secretary Robert Reid said he was told by the ministry during a meeting in May this year that an Indian restaurant chain in Auckland was being investigated due to its treatment and underpayment of workers.
Mr Reid said it is common practice among some restaurant chains, and migrant workers often have to work up to 70 hours a week.