Corporate theft of workers holiday pay uncovered


Corporate theft of workers’ holiday pay appears to be routine according to an investigation by Unite Union that began last year.

Most major companies we deal with, including those in security, cinemas, and fast food appear to calculate their workers annual leave pay only as a certain number of hours.

The hours of holiday leave these companies to calculate that it owes its workers is recorded on payslips. The workers then apply for and receive a certain number of hours when they take annual leave.

But this method of calculation does not comply with the law and workers are being cheated out of their entitlements.

The Holidays Act says that during the one year period after you start work for a company you “accrue” annual leave at the rate of about 8% of your pay. In most situations this is recorded as a certain number of hours on your pay slip. If you leave the company before the year is up this accrued leave has to be paid to you.

However, after a year, the leave becomes an “entitlement” to four weeks annual leave. You then begin “accruing” annual leave again for the next year, which becomes an entitlement again at the anniversary date of your employment.

The “entitlement” leave should be recorded as a weekly entitlement. But many companies continue to simply calculate leave as a certain number of hours. They also often mix up the hours that are part of your “entitlement” with those that are “accrued” in a single number.

Companies that do this are those that have workers who work irregular hours from week to week. It is simply easier (and cheaper) to do it that way. But it is unlawful and results in many workers being underpaid their holiday leave.

TDB Recommends

This is because when leave becomes an “entitlement” of four weeks the company is obliged to calculate leave by using the higher number of either the average weekly pay of the previous year or the average of the previous four weeks.

Workers who begin work in a fast food company will often be working more average hours at the end of the year before they take their leave. They may start working 10 hours a week and finish the year working 30 hours a week.The average may be 20 hours a week but the holiday pay entitlement should be calculated at the 30 hours a week they are working in the month before they take their leave

Most companies simply do not do this double calculation.

We challenged a security company on the issue last year and they accepted that they were in the wrong legally and agreed to recalculate everyone’s leave. Unite got $17,000 back pay for around 60 members.

These companies know what they are doing. Payroll companies also know what they should do. We have been told by one of them that they can do the calculation for their clients it but the companies they provide services for are happy not to comply.

We will probably have to take these companies to court to get them to comply. But it makes me very angry that corporate thieves can cheat their staff of their holidays for years and the most they will suffer as a consequence of being caught is paying what they would have paid in the first place.

Banks can systematically cheat the New Zealand government of billions of dollars in taxes and then when they are found guilty they negotiate to pay part a reduced percentage of that money. No one goes to jail of course.

The wealthy treat tax as a voluntary activity that doesn’t apply to them. Inland Revenue found that “two-thirds of New Zealand’s richest people are not paying the top personal tax rate, with increasingly complex overseas schemes and bank accounts being used to evade the taxman.”

But if you are a solo mum who has a boyfriend over to stay more often than is legally permissible you are prosecuted for benefit fraud and sent to jail.

Workers have to pay every cent of their tax. It is taken from us as payroll tax before we get our net pay. We then have to pay tax on everything we buy. Capitalists write tax laws so that their income doesn’t even get taxed. Nearly all capital gains are untaxed. You don’t have to tax housing if that is too hard politically. But what about the sharemarket gains? What about profit from commercial property sales?

New Zealand and Australia are virtually the only countries in the world that capitalist owners of shares don’t pay the full tax on dividend income. The tax owed by an individual on the dividend payment they receive can be reduced by whatever amount of company tax that has already been paid. The super rich waged a campaign against “double taxation” and convinced their compliant parliamentary representatives even though company profits are a completely different from an individuals dividend income. If the logic worked for the rich then why doesn’t the same logic apply to workers. Why aren’t their taxes reduced as well? Why is their income not the same as a capitalist investors income?

Why is it that we can never find the police when we have been burgled or assaulted but they turn up in their dozens or hundreds when we have a workers picket or protest of any kind?

Why is that even police drink-drive roadblocks are far more likely to be set up in Otara or Porirua than Remuera?

Why is it that we have thousands of police but only a handful of labour inspectors to ensure workers are protected from criminal employers?

The hypocrisy of the upper-class commentators who take it upon themselves to lecture the poor must be exposed and rejected. That is why we need to inoculate ourselves from the right wing media campaigns against so-called welfare bludgers. They want to divert our attention away from the real criminal fraudsters who make up the ruling rich of this country. Much of the alleged benefit fraud is simply people trying to survive in an increasingly complex system that seems designed to deny access to benefit support.

But even the highest estimate of what that fraud amounts to in any one year is about $30 million compared to the billions lost to tax fraud committed by super-rich individuals and corporations.

I’m in favour of a law and order campaign that targets the real criminals in our society. If we were serious about tax fraud we would make sure that the biggest fraudsters went to jail – beginning with the chief executives of every major bank in the country. The amounts the banks should be made to pay in penalties should be 10 or 20 times the amount defrauded.

Wage theft should be a crime. Workers should be compensated by the company paying 10 or twenty times what they owe as a penalty to the workers. Serious offending should see the owners go to jail.

That doesn’t happen of course. You can’t even get people or companies prosecuted for killing their staff through criminal negligence in this country. Who went to jail after 43 workers died at Pike River mine? No one.

Why won’t my wish list of prosecutions be happening anytime soon? The simple answer is that there is always one rule for the rich and one for the poor.

But why do we put it with it. It is time for a radical change in who calls the shots in society. We need to take up the call of Bernie Sanders, a leading US presidential nominee, who wants a “political revolution” against the “billionaires and oligarchs” who have hijacked the political system.



  1. “The super rich waged a campaign against “double taxation” and convinced their compliant parliamentary representatives even though company profits are a completely different from an individuals dividend income. If the logic worked for the rich then why doesn’t the same logic apply to workers. Why aren’t their taxes reduced as well? Why is their income not the same as a capitalist investors income?”

    This is not actually true. Dividends are not actually income in the ordinary sense of the word, but merely a transfer of income, from the company to the shareholder, on which tax has already been paid by the company (albeit at a different rate from the shareholder’s personal rate.)

    A better system would be one in which the company tax rate was zero and all profits were required to be paid, as dividends, to the shareholders, who would then pay the necessary tax at their own tax rates. If a company wished to retain part of its earnings all or part of its dividends would need to be in the form of new shares.

    Workers’ wages are considered “income in the ordinary sense of the word” and are therefore taxed in the normal way.

  2. Great Post @ Mike Treen.

    ( Long and ranty. My apologies in advance. )

    I’ve been writing, for most of my time at Tumeke then here ,that NZ’s been crippled by a swindle so vast and complex that it’d break international records for the sheer scale of it. Certainly, when the equation of people per hectare measured against how wealthy/rich NZ is in vital resources we are, yet, we’re on the bones of our arses but for a few ‘ elite’ wealthy ( Read criminals. )
    Once farmer made/grown/harvested product leaves the farm gate? That product attracts the largest post manufactured increase in $-value of any manufactured goods in NZ. Perhaps in the world.
    Once the $-value of that product disappears into our corrupt financial system having been diverted and converted by so called ‘ Producer Boards’ it becomes like any other mechanism designed to make those who fiddle with revenue [that] multi billionaires.
    For those who are in the know within that income stream? They can do what ever they please with those monies and it never, ever finds its way back into our country in the form of taxation/levies etc as it once did which built our welfare systems, infrastructure and resources. It’d a been a feeding frenzy of greed and power. Clean green NZ has the dirtiest laundry imaginable.

    You ask ” Why do we put up with it? ”

    Professor Stanley Milgram could answer that.

    To put it crudely, we’ve been head-fucked. After generations of lies and swindling we’ve been taught to hate each other and revere our oppressors as financial Gods lording it over us. It’s far easier to whack the missus and the kids than get a group of guys together and get stuck in to our abusers.

    I’ve had the odd person here ask me to substantiate the accusations I’ve made above. They want minute and detail.
    To answer that. Well, to be honest it’s too personal. To close to the bone. I get a hatred boiling up in my guts and I fear that it’ll give me a cancer like I think it did my mother after her watching my father fall into a wretched state after the Bank swindled him out of his farm.

    Instead, I think it’s more useful to step back, look at the bigger picture for now and talk about that until the penny drops. The time’s not yet perfect to recover our country from its oppressors because the masses have yet to be engaged judging from the most recent rallies I’ve attended.
    I keep this in mind.
    NZ. A country the size of the UK but with 4.3 million people against the UK’s 60 million.
    NZ. Incredibly wealthy in vital resources. I.E. water, soils, forests, fisheries and all secure out in a vast and heaving ocean thousands of kilometres away from nutters with guns and bombs.
    NZ’ers. Highest suicide rates, highest prison stats, highest mental health issues, highest child poverty stats, dreadfully poor quality state housing and soon to be sold off, incredibly expensive foods, fuels, public transport, private housing, tele-com’s, electricity and while we lean breathlessly against the wall we’ve been pushed up against, our very own politicians, politicians we pay huge salaries plus entitlements to, to take best care of us are selling our very own lands out from under our feet to foreigners who have more money than we’re able to keep for ourselves because those same politicians have sold our resources and infrastructure to those same foreign investors for their profits and our loss of control.

    Again. You ask ” Why do we put up with it? ”

    You could also ask. ” What can we do about it ? ”

    My answer to that is simple. Make the politicians we pay to do a job for us, do that fucking job!
    If they do not do that job? Out the fuckers go. It is that simple. Go to their electoral office , brothel, dungeon, high end housing estate, off shore holiday destination and grab the worthless bastards by the scruff of the neck and throw them out into the street.
    Then ? Off they go to a public inquiry/charges/prison then stripped of assets. Then those whom have benefited from their betrayals of us are equally targeted and dealt with accordingly.
    I fear however, that the more likely scenario is that one might just have a beer and think how great it’d be if Richie McCaw married your son our daughter.

  3. Great post, Mike.

    The bloody government is primarily run by the wealthy and mostly for the wealthy.

    Equal blame lies with the voters who seem to be blind, deaf and quote foolish not to realise how our democracy, fairness, justice and freedom has been hijacked by the privileged, the wealthy, the greedy, the liars, the powerful and the corporates.

    Wake up New Zealand.

  4. Fact is: The government does not care, and the customers do not care, as they want cheap food, and quickly, that is, or else.

    So McDonalds and others that may be doing this will continue to get away with it, unless they are taken to court. That costs money again, will Unite pay this, to get their members what they should be getting?

    We can take this further, there are many people ripped off left right and centre, also those on benefits, those that may apply for ACC, those that should get other support. The government did years ago restrict access to legal aid, and put tight conditions on repayment and other requirements, so few people can now get a lawyer, as they will struggle to get legal aid.

    That enables many government agencies and many businesses and employers to get away with endless rip off treatments, day in and out, and most people have given up, they just hope for a better job or whatever, and move on, seeing complaining will get them nowhere.

    Welcome to the brighter future, that is for some, who do well, and especially those who can flex their muscles and force others into servitude and submission.

  5. Great stuff mike .Further to your comments about tax evasion by the rich,Ive lost my citation for this alas,but believe it reliable or I wouldn’t have made note of it:in 2013 107 of the richest 193 people in NZ did not declare their income to inland revenue,And paid no tax on it
    Further,in 2013 it was estimated the world wide at least $36 trillion dollars of taxable income was hidden in tax havens.
    This is the sort of stuff that makes me want to dig out my sniper rifle

  6. Great stuff Mike.
    Further to you comments on tax evasion.In 2013,107 out of the richest 200 people in NZ did not declare their income to inland revenue & were not taxed on it.
    And world wide in 2013 it was estimated that $36 trillion dollars worth of untaxed income was hidden in tax havens
    Makes me wish I had a good sniper rifle

  7. When we all worked full time jobs, eight hours a day (remember when!) it was all pretty simple. You got so many weeks a year leave at the normal pay you would have got for a normal week, usually including allowances.
    Now we have so many pretend jobs – contracts (not jobs), zero hours, part-time, casual, part-time permanent, call-on, etc. it is confusing and some unscrupulous employers take advantage of the confusion by paying people less and few people notice because it is so complicated to work out what the real rate should be.
    Successive governments have made it worse by messing around with the Holidays Act and legislation covering mondayisation of holidays.
    It is a f…g b…..mess! (as Johnny Rotten once sang).
    Watch National one day come up with a “solution” – just wipe holiday pay altogether and everybody will have to negotiate it separately as part of their “contract”. This will effectively mean bye-bye holidays and welcome to your new home – your workplace.
    OK trolls, let’s see your excuses.
    I’m looking forward to a rumble today so when you have stopped foaming at the mouth, start dreaming up some rubbish like you always do and lets have it.
    I’m not expecting any sense from you right-wing trolls but I am open to surprises.

Comments are closed.