About 15,750 police staff were underpaid. Police are still searching for some staff to send them the money they are owed.

The police have been forced to pay out more than $33 million since December to short-changed staff, after a pay bungle was discovered by a labour inspector.

Some cases dated back to as far as 2004, and some staff had died before the payments could be made.

About 15,750 of police staff were owed a total of $33.3 million after a Ministry of Business, Employment and Innovation labour inspector noticed police had underpaid its staff on some statutory holidays, sick leave, annual leave and bereavement leave payments.

FAIRFAX NZ The average amount of pay owed to staff was $1600.

About 9819 people were owed more than $1000 in lost pay, with the average amount owed $1600.

Police started paying back the missing money in December but – as of late last week – $887,000 was still owed.

Police acting deputy chief executive (people) Kaye Ryan said police were having trouble tracking down some ex-employees, while others had died.

"We have written to the last known address of these people and will work with the estates of our former staff to ensure remediation payments are made."

Police had known since 2014 that there was a payroll problem, so had started setting aside money for it, she said.

"As the funds were accrued over time there was no impact on police operations from this payment.

"This is a significant amount, however this needs to be considered in the context of NZ police's fortnightly payroll of $40 million," Ryan said.

It was a dispute with the Police Association in 2014 – for a much smaller amount – that led to the discovery being made.

When the pay dispute was escalated to the ministry, a labour inspector looking into the accounts noticed a much bigger, multi-million dollar problem.

In April 2015, the police was ordered to pay back those lost wages, but only those covered within the maximum term allowed under legislation: six years.

THE BUNGLE

MBIE labour inspectorate general manager George Mason said police had breached the Holidays Act 2003 around the calculation of what employees should be paid for bereavement leave, alternative holidays, sick leave and public holidays.

He said employers needed to properly record daily hours and extra payments made, and put that into their payroll systems, "especially where employees work fluctuating hours and/or receive fluctuating pay".

Maximum penalties under the law are $20,000 per breach for companies, and $10,000 per breach for individual penalties.

The Labour Inspectorate did not seek penalties in this case, as the circumstances of the breaches and the police response did not warrant it, Mason said.

Labour Leader Andrew Little said it was surprising, in an organisation as large as police, that it took so long to pick up the blunder.

Large organisations he knew of tended to do thorough audits every few years.

"You wonder what levels of checks and audits are going on," he said.

In cases were staff had died being owed money, police should make sure the money owed was paid to their estates, Little said.

Police Association president Greg O'Connor said no one had noticed they were being underpaid until the labour inspector pointed it out.

But the association was happy that police had dealt with the issue.

"I don't think it was anyone's fault, really, and the police have to take some credit for the fact that, once it was discovered, [they set] about fixing it."

MORE PENNIES FOR COPPERS

In 2014 Police paid out about $2.95 million to nearly 3500 former staff to correct mistakes made in calculating their pay.

Eleven former staff got more than $20,000 each, with a further 26 getting between $10,000 and $20,000, and 96 getting between $5000 and $10,000, police said.

At the other end of the scale, 485 former staff were owed less than $1, and altogether 807 were owed less than $10, and 2021 less than $200.

The problem arose after the Holidays Act was applied to police in 2004, and was not fixed until the police payment system was upgraded in 2010.

A BIG OLD BILL

$33.3 million owed in total

$887,000 still owing

$1600 the average amount owed

15,750 police staff affected