| Wage theft is now a crime in New Zealand, after the Crimes (Theft by Employer) Amendment Act 2025 came into force on 14 March 2025, introducing a new offence under the Crimes Act 1961. An individual who is found guilty of the new offence, “theft by employer”, is now liable to penalties under the Crimes Act 1961, including imprisonment.
Criminalising wage theft
The new offence provides that an employer commits theft if the employer intentionally fails, without reasonable excuse, to pay the money to the employee.
The offence applies where an employer is required to pay any money owed to an employee, whether under an employment agreement, or under an Act (such as the Minimum Wage Act 1983, the Holidays Act 2003 or Wages Protection Act 1983).
The potential penalty for the offence is the same as that for theft under section 223 of the Crimes Act 1961. This section provides for liability as follows:
- if the value of the property stolen exceeds $1,000, to imprisonment for a term not exceeding 7 years; or
- if the value of the property stolen exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 1 year; or
- if the value of the property stolen does not exceed $500, to imprisonment for a term not exceeding 3 months.
The explanatory note to the bill as introduced provided that, currently, offences relating to theft by a person in a special relationship are insufficient to account for wage theft by employers. Existing processes are too complex, and can be a deterrent for those that are victims of wage theft. The explanatory note further states that the new offence created by the Bill will capture employers who owe wages and intentionally do not pay them to the employee. This includes the unlawful withholding of wages, salaries, and other monetary entitlements within an employment relationship.
Currently, an employee is already able to take civil legal action against their employer to recover money owing to them. This generally involves initiating legal proceedings in the Employment Relations Authority, and seeking recovery of the unpaid amount. Applicants can also seek penalties against their employer for a breach of their employment agreement, and payment of interest on the amount owing.
Concluding remarks
While this new development represents strengthened protection of workers’ rights, the penalty is still relatively light when compared to other offences involving theft, such as theft by a person in a special relationship which has a maximum penalty of 7 years’ imprisonment (regardless of quantum). That said, it does now mean an employer may potentially be liable to a criminal conviction specifically for wage theft.
There have naturally been mixed reactions to the new law, with many welcoming these changes on the basis that the prospect of a criminal conviction will deter employers from withholding payments due to employees. On the other hand, some criticise the legislation, fearing it will unnecessarily burden the already busy criminal justice system. We note that as this is a crime, the prosecuting agency will be required to meet the high threshold to prosecute under the Solicitor-General’s Prosecution Guidelines (which addresses both evidential sufficiency and the public interest). Another concern raised about the legislation is that some employees may abuse it, and make false allegations against their employers.
Any criminal conviction will have wide ranging implications for an employer, regardless of the ultimate sentence imposed. Therefore, if an employer does face an allegation of wage theft (whether criminal or otherwise), we would recommend seeking legal advice.
You can view the Crimes (Theft by Employer) Amendment Act 2025 here.
If you require any advice or assistance relating to employment law, including payment of wages or holiday pay, please contact us. We would be delighted to assist. |
