Wage Theft Is Now a Crime in New Zealand: What That Actually Means

For a long time in New Zealand, if an employer did not pay wages properly, it was treated as a workplace dispute. That meant employees had to chase what they were owed through the Employment Relations Authority or the courts, often slowly and at their own expense.

That has now changed in a significant way.

As of 14 March 2025, the law has drawn a hard line. Deliberately not paying wages can now be a criminal offence.

So what’s actually illegal now?

Under the Crimes (Theft by Employer) Amendment Act 2025, an employer commits a crime if they:

• Intentionally fail to pay wages or entitlements

• Without a reasonable excuse

• Where those wages are legally owed under an employment agreement or legislation

In simple terms:

If an employer knowingly withholds pay they are required to give, that can now be treated as theft.

This is not about mistakes or payroll errors. The focus is on deliberate behaviour.

How serious is it?

Very.

If the unpaid wages are over $1,000, the offence can carry penalties of up to 7 years’ imprisonment.

That is a dramatic shift from the previous system, where the worst consequence was usually financial penalties or repayment orders.

Why was this change made?

Because the old system was not working well enough.

Wage theft has been a persistent issue, particularly affecting:

• Migrant workers

• Low-income workers

• People in industries with weak oversight

Previously, enforcement was often slow, reactive, and relatively weak as a deterrent.

By turning wage theft into a crime, the law aims to:

• Deter exploitative employers

• Give enforcement agencies stronger tools

• Signal that this conduct is not just a civil dispute, but serious wrongdoing

A real-world example

One recent case, before criminal prosecutions under the new law have really started, involved:

• A business owing over $158,000 in unpaid wages

• Workers being required to work up to 14 hours a day, seven days a week

• Deductions being taken under the guise of “loan repayments”

The company was fined over $150,000.

Under the new law, conduct like this could potentially go further into criminal prosecution territory.

Does this mean employers are now at risk of jail for payroll mistakes?

No, and this is important.

The law targets intentional conduct without reasonable excuse.

So:

• A genuine payroll error is not a crime

• A dispute about interpretation is not a crime

• A cashflow issue handled transparently is unlikely to be a crime

But:

• Knowingly refusing to pay

• Deliberately underpaying

• Creating sham deductions

These are now firmly in dangerous territory.

What should employers be doing now?

At a minimum:

• Make sure payroll systems are accurate and audited

• Ensure employment agreements are clear and compliant

• Avoid any questionable deductions or arrangements

• Fix underpayments quickly and transparently

Because the risk is no longer just repayment later. It can be criminal liability.

What should employees know?

If you are not being paid properly, you now have:

• The usual employment law remedies, and

• The possibility that the conduct may be treated as a criminal matter

That does not mean every case will be prosecuted, but it changes the leverage significantly.

The bigger picture

This law is part of a broader shift in employment law in New Zealand:

• Stronger enforcement

• Greater accountability

• A move away from treating exploitation as just a dispute

The direction is clear. Some conduct is now considered serious enough to justify criminal punishment.