Company director personally liable for wage arrears…

The Employment Relations Authority has made an order that a company director personally pay over $18,000 in unpaid holiday pay, wage arrears, unpaid public holiday pay and unpaid alternate days for public holidays worked.

Although the employee was employed by a company, the director was held personally liable because the director knew of the company’s obligations to make the payments for wages and holiday pay and authorised the default by the company in making those payments.

This action was taken against the director after the Employment Relations Authority had made an order against the company itself, which had not been paid.

Directors should be aware that they cannot hide behind a corporate entity when it comes to the non-payment of wages and holiday pay due to the extensive powers to make directors personally liable for the failure of the company to make those payments.

Alan Knowsley

Employment Lawyer
Wellington