Food Delivery Company Fined for Underpaying Interns

 

An Auckland-based food delivery company, Woop, has recently been fined $43,000 for paying student interns for only 20 of the 40 hours they worked.

The company, a major player in New Zealand’s meal kit market, faced scrutiny after hiring French interns under questionable employment terms.

 

Background

Between 2016 and 2018, Woop engaged seven interns from three French tertiary institutions. Thomas Dietz, Woop’s director and a French national, established the internship program based on his own career experiences.

Despite complying with the French institutions’ requirements, the Employment Relations Authority (ERA) found that six of the seven agreements did not meet New Zealand’s minimum compensation requirements.

According to the ERA, the interns were required to be present in the workplace for 40 hours a week but were only paid for 20 hours. Woop claimed the interns worked 20 hours and spent the remaining time on self-directed learning.

 

Issues

The Labour Inspectorate pursued penalties for Woop’s breaches of the minimum wage and failing to keep proper employment records.

Woop defended its practices, arguing that the inspectorate’s investigation was inadequate and that previous interns were satisfied with the arrangements.

The company also claimed the breaches were inadvertent, as the agreements were provided by the French institutions and included both tasks and learning.

Eventually, Woop admitted the interns should have been paid for the full 40 hours and adjusted their holiday entitlements.

 

ERA Holding

The ERA found that Woop did not comply with New Zealand employment laws by paying the interns for only half their working hours.

Despite Woop’s claims of good faith and the provision of additional benefits such as meals and a ski trip, the ERA highlighted the power imbalance between the interns and the company.

It ruled that Woop was negligent but did not deliberately exploit the interns. The company was ordered to pay a $39,000 penalty for the 26 admitted breaches, with $13,000 distributed among the affected employees.

Woop was also ordered to pay $4071 towards the inspectorate’s legal costs.

 

Takeaways

This case highlights the importance of understanding and adhering to the relevant employment law especially when hiring interns. Employers must ensure compliance to protect employee rights and avoid legal repercussions.

It also raises issues around the legality of unpaid internships. For more information around the distinction between volunteer and employee – check out our Gloriavale Blog here.

If you are an employee or employer unsure about your legal rights and obligations, please reach out to the team here at Watermark Employment Law.

We are proud to offer initial consultation calls free of charge.

Watermark Employment Law are specialist employment lawyers acting for employers and employees.