A New Plymouth restaurant business and its two directors have been fined for "egregious" breaches of minimum employment standards – including demanding one worker pay a premium of almost $17,000 for their job.

Dilkhush Pvt Limited – which traded as Area 41 Restaurant and Bar – and its directors Jaswant Singh Dham and Pushkar Tunnare have been ordered by the Employment Relations Authority (ERA) to pay more than $86,500 total in wages, arrears and penalties.

The Labour Inspectorate launched its investigation in August 2021, after a worker complained he was made to pay for his job at the restaurant.

"During the investigation, the Labour Inspector identified five workers – four of whom were migrants – who had been affected by the breaches committed by the business," a statement from the Ministry of Business, Employment and Innovation (MBIE) said today.

"The affected employees were on visas, two of whom were visa dependent on Dilkhush Pvt Limited (DPL)."

Among the breaches: A premium of $16,900 was demanded from a worker, holiday pay was underpaid, minimum wage was not paid, a worker was made to repay a portion of his wages each week and record keeping was inadequate.

"Between 31 January 2020 and 29 July 2021, the directors forced one of the workers to repay between $200 and $300 a week from his wages because they were not prepared to pay him the $21 an hour required to meet visa requirements set by Immigration New Zealand. The total amount the worker repaid to his employers was $8900," MBIE said.

"The worker also told the inspector he had been paid for 40 hours work per week but often worked more hours for which he had not been paid."

The fine was divided with DPL and its directors to pay arrears of about $26,500, DPL pay a penalty of $40,000, and Dham and Tunnare to jointly pay a penalty of $20,000.

Simon Humphries, head of the Labour Inspectorate, said the business and directors had "taken advantage of their relationship with the vulnerability of the workers' situation".

He said they had intentionally failed to provide the workers with their minimum entitlements, "thereby gaining financial advantage".

The business and directors accepted they were guilty of the breaches, MBIE said. They also accepted that they were responsible for repaying the workers the outstanding amounts owed, and they had failed to keep wage, time, holiday and leave records for two of the workers.

Authority Member Geoff O'Sullivan said the wages arrears owed were significant: "Indeed, they are higher than the amount now claimed because DPL has repaid some of the illegal premium and some of the other arrears, however there is still outstanding arrears of some $26,587.88."

He ordered that $3000 of the penalty was paid to the worker who was made to pay a premium for his job, calling it an "egregious" example of an employer exploiting the power imbalance of an employment relationship.

"The fact these employers accepted they had broken the law and have repaid some of what they owe these workers does not excuse their exploitative behaviour."