Blatant and endemic: Illegal 'volunteer' labour rife in NZ's accommodation industry

Wednesday, 7 December 2016

A Labour Inspectorate investigation into illegal use of volunteer labour has found the practice is rife in the accommodation sector.

The inspectorate launched an investigation into such deals after receiving complaints from workers, and from businesses that felt competitors using freebie labour were getting an unfair advantage.

Over the last three months it has investigated 14 employers, and only two were found to be complying with the law.

In a position statement issued today, the Inspectorate clarified guidelines for employers and general manager George Mason warned businesses about disguising employees as 'volunteers.' 

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 'Businesses cannot evade their obligations as employers by calling their workers volunteers and then simply rewarding them with a bed in a dormitory, food and Wi-Fi rather than a fair wage.'

'When you take a closer look at some of these schemes where businesses have workers putting in as many as 32 hours per week cleaning linen, working reception, and vacuuming, many of them are blatantly employment relationships and they are taking advantage of these workers.'

A number of infringement notices had been issued, but this decision was later reviewed and formal warnings issued instead.

These businesses would be revisited within six months to ensure they were complying with the law. 

One case was deemed serious enough to take to the Employment Relations Authority, Mason said.

Businesses recruited travellers to work in exchange for accommodation by advertising on websites for schemes such as Willing Workers on Organic Farms (WWOOF) and VolunteerX.

The practice was 'endemic' in the accommodation industry but the inspectorate understood other businesses may also be using volunteers, Mason said. 

'Wherever a worker is being rewarded in a business at whatever level, the Labour Inspectorate's starting position is that these people are employees and minimum employment standards apply. 

'This means providing clear documentation for these workers, with written employment agreements, accommodation agreements, keeping wage and time records, paying wages in money, and paying tax.'

Employers could deduct reasonable accommodation costs from an employee's wages provided it was agreed in writing and the deduction was made before wages were paid.

Advocacy spokesperson for the Backpacker Youth and Adventure Tourism Association Brian Westwood said he understood some backpacker lodges fined as a result of the crack down by the Labour Inspectorate had been given more time to get their affairs in order, and their fines rescinded. 

Using volunteers had been standard practice in the sector for decades, but ambiguity around board-for-wages arrangements had now been sorted, he said.

'These people that are working outside the rules; fine them.' 

Rachael Shadbolt of Hospitality New Zealand said they warned their members back in July when news of board-for-wages concerns broke on Stuff, and they appreciated clarification of the rules.

'There will be some that argue that they can't afford this, that and the other, but at the end of the day you must pay people appropriately and you must operate within the law. 

'The biggy​ is of course there has to be a working holiday visa, it can't just be a holiday visa . Some of these backpackers that come into the country on just a holiday visa might think that they can just WWOOFer their way around the country.

'The greater concern would be if it dried up the availability of workers in parts of the country where it's really hard to get people, and quite often these work and accommodation scenarios do fill a gap. So as long as our operators are doing things lawfully it should not alter things.'