Restaurant business, owner fined $130,000 over worker exploitation

A restaurant and takeaway business operating in Auckland and Cromwell and its owner have been ordered to pay $130,000 in penalties for exploiting workers, after five former employees were found to be owed more than $147,000 in wage arrears.

The Employment Relations Authority (ERA) ordered SSM Investments Limited to pay $90,000 in penalties, while its owner and sole director, Shazneen Shariza Khan, was ordered to pay $40,000.

The penalties follow an earlier ERA determination ordering $147,001 in arrears to five former employees who worked across the business’s Auckland and Cromwell operations.

The workers were owed amounts ranging from more than $7,000 to over $78,500.

ERA member Philip Cheyne found the business had breached several minimum employment standards, including failing to pay minimum wages, making unlawful deductions from employees’ wages and failing to provide sick leave, holiday and public holiday pay.

The business also failed to maintain accurate wage and time records, as well as holidays and leave records.

Cheyne found Khan was personally involved in the breaches and was therefore also liable for penalties.

In determining the penalties, Cheyne said the conduct "undermines implied trust and confidence obligations and statutory good faith requirements" and "demonstrates the inherent inequity of power in the employment relationship and undermines employment standards".

The case followed a Labour Inspectorate investigation triggered by complaints from employees working at the business’s Cromwell branch.

Following a part-heard investigation meeting before the ERA, SSM Investments Limited and Khan agreed they were liable for the $147,001 owed to the five workers.

Funds covering the arrears were secured through a freezing order in October 2025 and held in trust. The money has since been paid to the affected workers.

Labour Inspectorate Investigations Manager for the Central and Southern regions, Taahera Begum, said the breaches were serious and had caused harm to the workers, despite the business and Khan acknowledging their wrongdoing.

“The penalties should send a clear message to employers that exploiting vulnerable workers will result in significant financial consequences.

"These workers were reliant on their employer to meet basic minimum employment standards. Instead, they were underpaid, had unlawful deductions made from their wages and were denied lawful leave entitlements.”

Begum said the extent and duration of the breaches had caused unnecessary stress and hardship for the employees.

“This was sustained and egregious exploitation with 1 employee owed more than NZD $78,500, including $49,000 in unpaid wages and a further $11,000 in unlawful deductions for rent, loans and other items."

"The ERA recognised the significant power imbalance that existed in this employment relationship. Employers who exploit vulnerable workers and ignore minimum employment standards can expect the Labour Inspectorate to take enforcement action."