Employees will now be able to complain to the Police if their full wages aren't paid. The Crimes (Theft by Employer) Amendment Bill has passed and came into force on 13 March 2025. The new law makes it (under the Crimes Act) a crime for employers to intentionally fail, without reasonable excuse, to pay employees any money owed under their employment agreement or legislation (including the Minimum Wage and Holidays Acts).

What the new law covers

The new offence is intended to capture employers who owe wages and intentionally do not pay them to employees. This includes the unlawful withholding of wages, salaries, and other monetary entitlements in an employment relationship. The requirement that the failure be 'intentional' and 'without reasonable excuse' ensures good employers, or employers who make genuine mistakes are not criminalised. An example of this may be where an employer knows their payroll system underpays holiday pay and intends to remedy this as soon as possible.  

Many similar jurisdictions to New Zealand such as California, Victoria, Queensland, Norway, and most recently the Commonwealth of Australia have, in recent years, passed similar legislation criminalising wage-theft by employers.

Concerns raised by the New Zealand Law Society

The New Zealand Law Society has previously highlighted significant legal and practical issues with the new law. These include that the cost of litigation and any money recovered in fines will transfer to the Crown, that the relationship between the new offence, insolvency laws and legal duties imposed on Directors is unclear and whether a repeated failure to pay wages will be one offence or whether each underpayment will be a separate offence.

What employers need to know

It will take time to understand the full impact of the new law. Initially, we anticipate that the Police will only have the resource to investigate the most serious complaints with any urgency. However, the new law 'ups the ante' in regard to wage arrears and minimum employment claims. For example, employers who are aware of non-compliance with minimum employment obligations who do not take steps to remedy the non-compliance could now face criminal prosecution, individuals within the company could be personally prosecuted in some circumstances and face imprisonment and employers will need to consider if they need to exercise their privilege against self-incrimination in the context of responding to employee claims.

Recommendations for employers

We recommend employers review their policies and processes to ensure compliance and implement measures to minimise the risk of criminal prosecution for wage theft.

If you have questions about how these changes may affect you, or your workers, please get in touch with our employment partner Anne Wilson or one of our employment law specialists.