H&M continues to underpay staff citing delays in wage subsidy

Wednesday, 3 March 2021

Businesses which incorrectly accessed the wage subsidy could face criminal prosecutions.

Swedish retail giant is continuing to underpay staff during the Alert Level 3 lockdown, using the excuse of wage subsidy delays.

In emails seen by Stuff, H&M told workers it would pay them 60 per cent of their wages from February 28 until March 6.

Staff were told they could top up their pay to 80 per cent or 100 per cent using annual leave.

Dundas Street Employment Lawyers senior associate Chloe Luscombe said businesses that were paying staff less than their contracted pay without their agreement could face wage arrears claims.

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H&M New Zealand reported revenue of 442 million kronor (NZ$72m) in the year to November 2020.

Luscombe said employers could pay staff less than their normal wage, and top it up with annual holidays, only if employees consented to this and were given a reasonable amount of time to consider their options.

Employers that forced workers to take annual leave during the lockdown, without genuine consultation and less than 14 days notice, acted unlawfully, she said.

First Union retail secretary Tali Williams says H&M was acting unlawfully.

Have you been affected? Get in touch anuja.nadkarni@stuff.co.nz

H&M told staff it would apply for the wage subsidy if it was eligible but was awaiting details from the Ministry of Social Development on how to apply for the latest round.

“At this point in time, we are awaiting further information from the government.

“Currently, the details of the subsidy are not available, nor are we able to apply. If we are eligible for the wage subsidy, we will absolutely apply for this,” the H&M said in the email.

The retailer also underpaid staff during the third lockdown in February.

H&M’s total revenue in New Zealand for the year ending November 30 was 442 million kronor (NZ$72m), according to a company report.

First Union organiser Tali Williams said H&M was profitable and the company told the union it did not expect to be eligible for the wage subsidy.

“These aren’t small businesses that absolutely require the wage subsidy to be able to pay staff in the meantime,” Williams said.

“What they’re doing is not lawful in our view, but they continue along these lines.”

The retailer also underpaid staff during the third lockdown in February.

H&M has received more than $3.2m in wage subsidies previously.

H&M also owned retailer Cos, which recently opened new stores in Auckland, at Commercial Bay and Westfield Newmarket malls.

The retailer also warned staff against publicly speaking out about the company underpaying them.

H&M has been approached for comment.

The latest round of the wage subsidy has faced delays, as applications were initially meant to be open on Monday, but were still unavailable to businesses.

MSD group employment general manager Jayne Russell said details of the wage subsidy scheme were still being finalised.

She said in the meantime employers could express an interest through the MSD website to receive an update on the scheme as it awaited final decisions by ministers.