Widespread workplace abuse and worker exploitation has been uncovered by a taskforce looking into breaches of labour standards.
The Labour Inspectorate received an additional $32 million from 1 July, which included an extra 10 staff, to investigate possible cases.
It found migrant and young workers were increasingly being affected.
General manager George Mason told Nine to Noona series of audits had been carried out on businesses, primarily in south Auckland, and revealed significant and serious problems.
A confidential phone line for reporting cases had also been set up.
"Problems with underpayment of wages, particular problems with record keeping and leave entitlements, and these were especially in those sectors that involve hospitality, retail, construction and horticulture," he said.
"It's increasingly migrant workers and young workers where we're seeing these problems."
In one case, a retail company was found to be paying its staff just $7 an hour.
Mr Mason said it found migrant workers who were working 40 hours a week but being paid for only about 20.
Northern Employers and Manufacturing Association chief executive Kim Campbell said worker exploitation breached human rights and undermined legitimate business.
"Just say you've got a brick-laying business and you've got 10 people, you're paying holiday pay... you're looking for all the safety things and so on, and some go down the road undercutting you, with people who have probably had their passports confiscated, probably not getting proper holidays and so on, or maybe not even being paid the right wages."
Workers treated 'almost like slaves'
Commenting on the findings, Migrant Workers Association spokesperson Anu Kaloti said many migrant workers were underpaid and did not receive any leave.
"There have been situations where the employer has provided the employees with so-called accommodation, but the places that they live in are just not fit for humans to live in. They're sort of almost like slaves."
Many employers would hire workers under the premise of training and would then let them go after just a few weeks, Ms Kaloti said.
Employers were finding ways to beat the system and exploit their staff, she said.
While the crackdown was good news, it was difficult to catch employers out when they manipulated their records.
"If a migrant worker, being a student, is only allowed to work 20 hours a week - but they're doing 40, 50, 60 hours a week - but the employer is pressuring them to sign on their records that they have only worked 20 hours or 18 hours."
Efforts to prevent further exploitation
The Labour Inspectorate's taskforce was building a profile of the types of businesses in which abuses might be happening, Mr Mason said - and, from there, it could launch proactive audits.
Worker exploitation was a priority and immigration officials could get involved if immigration offences were uncovered, such as in the recent Masala case, he said.
Inadequacy of record keeping and falsification of records was also a big concern and Mr Mason said, in the worst cases, it amounted to serious fraud, which was part of a pre-meditated scheme to exploit young or migrant workers.
Penalties for such abuses varied and, while the Labour Inspectorate could not bring criminal charges, it could seek civil penalties, which could be quite steep.
However cases in which there might also be immigration or tax issues were referred to other agencies for potential criminal prosecution.
