A long-standing Wellington cafe has been fined $2000 and has been suspended from issuing migrant work visas for six months after a number of employment breaches.

The almost 30-year-old Cuba St establishment has also been ordered to pay the correct holiday entitlements for 62 current and former employees.

Espressoholic was found in breach of the rules by the Labour Inspectorate, part of the Ministry of Business, Innovation and Employment.

MONIQUE FORD/STUFF The owners of the Wellington cafe have been given until February 22 to pay the correct holiday entitlements for 62 current and former employees.

"It's disappointing to find a well-established business failing to get the basics of employment right, including paying for public holidays," Labour Inspectorate regional manager David Milne said in a statement.

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"Every employer needs to keep wage, time, holiday and leave records to ensure they meet all minimum standards, and where these are not in place the Inspectorate can and will impose fines."

The cafe failed to keep compliant records, or correctly pay holiday pay and other entitlements, the Labour Inspectorate found.

It has been issued both an infringement notice and an improvement notice for the breach.

As well as holiday pay, the employers appeared to have failed to correctly pay for terminations or for sick and bereavement leave.

Leighton Dunlop, co-owner of Espressoholic disputed MBIE's account and said the employees had been paid.

He also disputed the number of staff that were owed, saying it was six, not 62. The issue was purely caused by cafe's electronic payroll system, he said.

"Thirty years we have been going and this is the first time it's ever come up. We use iPayroll which does the payrolls and everything ... we just pay out what they say.

"Holiday pays, bereavements, everything like that is calculated through them. Most of the country uses iPayroll, so I don't know why all of a sudden we are in the wrong."

Going back five years, there were lots of transient staff who lasted only a few days in the job and did not leave contact details or had returned overseas, Dunlop said.

"New rules and that are coming out all the time from the labour department, and they're changing fast and it's leaning a lot more towards the employee now than the employer.

"It's got to the stage that if you catch someone stealing, you've got to give them a warning. You can't fire them straight away."

The cafe would comply with the ruling if they could afford to, he said

Milne said a cheap cup of coffee shouldn't come at the expense of employees in the kitchen washing dishes, behind the espresso machine, or anywhere else in a business.

"Providing your employees with all their entitlements is an important part of running a business, both in a legal sense, and for maintaining a good brand."

He said there was "no excuse" for an employer not to keep contact information and records of all their staff or to make sure their payroll system was compliant with the law.



The Labour Inspectorate discovered the breaches late last year during a suite of compliance checks on cafes and restaurants in Auckland, Wellington and other centres.

The findings were indicative of a wider issue in the hospitality sector of how causal and part-time workers are treated, Milne said.

After about 70 compliance tests in Auckland, a trend of poor record keeping, issues around payment of holiday and entitlement and not providing employment agreements emerged amongst businesses.

"Our initial findings were that the part-timers and casuals were getting a bit of a raw deal," Milne said.

"It wouldn't be a stretch to think that we would find the same types of issues and challenges throughout the country and in Wellington."

Espressoholic first opened on Willis St in 1989. It moved two years later to Courtenay Place and moved again to its current Cuba St location in 2009.