Intentional non-payment of wages by employers without reasonable excuse can now be treated as theft, following Crimes Act amendments that came into effect on 14 March 2025. Legislation criminalising wage theft is not unique to New Zealand with similar legislation already existing in Norway, Australia and several US states. 

The Crimes (Theft by Employer) Amendment Bill may have “slipped under the radar” for many employers, with little to no awareness of its passage through Parliament. With the passing of the Bill, however, employers can now face criminal prosecution if they fail to pay their employees’ wages. 

The Bill was first introduced to Parliament by former Labour list MP Ibrahim Omer in April 2023 with the aim of treating the intentional withholding of wages by an employer as theft. Omer’s primary concern was the exploitation of vulnerable workers – exploitation he had experienced first-hand as an immigrant to New Zealand. Omer did not return to Parliament following the October 2023 election, but the Bill was championed by Labour MP Camilla Belich, and passed its third reading in March this year. 

Katie Nimon, Chairperson of the Education and Workforce Select Committee which heard the Bill, stated, “it shifts one aspect of employment law from the civil jurisdiction to the criminal jurisdiction”. 

Where previously any employment dispute was usually dealt with under the Employment Relations Act, police are now potentially involved with any sanctions regarding wage theft going through our criminal justice system. Opponents to the Bill highlighted: 

• We already have good processes in place for resolving employment related disputes – is this addition necessary?
• Wage theft claims could clog an already stretched criminal justice system and take away valuable police time that could be better spent tackling more pressing issues. This argument included reference to criminal proceedings taking a lot longer to reach a conclusion with the high threshold of establishing “beyond reasonable doubt”.
• If an allegation is made, the police process would inevitably apply with potential for police to arrive at an employer’s doorstep to conduct an investigation, which could unfairly harm the reputation of the employer.
• New penalties for employers including imprisonment for up to one year and a fine of up to $5,000 or both are too harsh. If the employer is a company the maximum penalty is a fine of up to $30,000.
• It could strain the relationship between employer and employee.
• Risk of employees and/or their advocates using the criminal process as a “bargaining chip” when dealing with broader employment issues.
• Employers facing further costs in defending themselves.
• The lack of data to identify the level of the problem the Bill was trying to resolve. 

No doubt the first wage theft allegations will create a significant amount of interest and determine whether some of these fears are realised. 

So, to the amendment itself. The wording is simple: 

220AA Theft by Employer

1)  This section applies to person (A) who –

(a) Employs another person (B); and
(b) Is required to pay any money owed to B in relation to the employment under –

(i) An employment agreement (whether or not the agreement is in writing); or

(ii) An Act (for example, the Holidays Act 2003, the Minimum Wage Act 1983 or the Wages Protection Act 1983).

(2) Person A commits theft if they intentionally fail, without reasonable excuse, to pay the money to Person B.

During the passage of the Bill the words “without reasonable excuse” were added by New Zealand First MP Casey Costello to cover a range of scenarios, where, while there was an intention not to pay, there was a reasonable excuse for not doing so. A number of these scenarios included "a payroll glitch, a delayed timesheet, a dispute over a timesheet or a cash flow issue". 

While the Bill primarily targets only a small number of employers, it is important for all employers to be aware of the risks it poses. There are no excuses for withholding money that employees are owed under their employment agreement or the Acts referred to in Section 220AA 1) (b) (ii) however, in reality, issues over final pays, Holidays Act interpretations and entitlement to allowances can occur. It is important that employers carefully consider whether they have a “reasonable excuse” if intentionally withholding payments.  

For employers and employees alike, time will tell as to how the police will manage wage theft allegations and whether the courts will extend the meaning of “without reasonable excuse” beyond the scenarios above. More importantly, the real test will be whether the new legislation achieves one of its key purposes – combating the intentional exploitation of vulnerable workers. 

If you need help with interpreting or ensuring that you abide by employment legislation, our Auckland, Taranaki and Hawke’s Bay HR experts are here to help.