MBIE calls construction a high-risk area for non-compliance, worker exploitation included. For firms employing migrants on the Accredited Employer Work Visa (AEWV), enforcement can reach past a fine to the right to hire from overseas at all.
In February 2026, MBIE’s Labour Inspectorate and Immigration Compliance and Investigations teams visited 147 construction businesses in Auckland and across the North Island. The integrated operation, called Operation Rimu, checked compliance with employment, immigration, company and tenancy laws. Early findings showed evidence at several companies of breaches of minimum employment standards, cash wage payments and poor record keeping.
MBIE’s release says Employment New Zealand received 516 complaints about the construction sector in 2025, and 56% of them came from the Auckland region. Simon Humphries, head of the Labour Inspectorate, said several company directors reported knowing about cash-wage and other unlawful practices, with talk in the industry, particularly in Auckland residential construction, of firms being undercut by enough to raise doubts about whether competing contracts were legitimate.
MBIE’s release says organised crime groups are exploiting weaknesses in the sector to launder money and exploit workers, setting up businesses that undercut those operating legally. Detective Superintendent Greg Williams, director of the National Organised Crime Group at New Zealand Police, said Police has identified “labour hire practices in the construction sector as a high-risk area for money laundering and worker exploitation.”
Humphries said the teams also found robust employment practices that met industry standards. MBIE says Operation Rimu is part of an ongoing focus on construction.
Immigration New Zealand (INZ) says more than 30,000 employers are accredited and more than 94,000 people hold an AEWV, as at 30 September 2026. By the same date, 1,728 employers had their accreditation revoked and 1,087 had it suspended, with 49 more under assessment. INZ notes some revocations are due to liquidation.
MBIE has received 9,594 complaints against accredited employers since 1 July 2022. INZ points out that figure counts allegations received, not ones proven.
INZ aims to check about 16% of accredited employers each year and has completed 9,611 post-accreditation checks on 6,592 employers. INZ doesn’t break these figures down by sector.
In the Operation Rimu release, MBIE said immigration teams were checking that accredited employers were meeting their obligations to migrant workers, and may suspend or revoke accreditation where employers are in breach.
A penalty for breaching employment standards also costs a firm its ability to support visa applications for a set time. Employment New Zealand calls this a stand-down period, and it covers AEWV accreditation, work visa support and residence applications based on employment.
One infringement notice from a Labour Inspector brings a 6-month stand-down, and several issued together bring 12 months.
Penalties from the Employment Relations Authority (ERA) or Employment Court against a company totalling $50,000 or more bring 24 months, as does a Court banning order of five years or longer, and that stand-down only starts once the ban ends. Employment New Zealand publishes the list of employers on a stand-down and updates it weekly. INZ keeps a second list for breaches of immigration law.
Premiums are the other big trap. Employment New Zealand says employees must never have to pay to get or keep a job. In a case Employment New Zealand reported in June 2026, the ERA ordered an Auckland landscaping company to repay a migrant worker the $44,750 he paid to secure his job, and made its sole director personally liable if the company can’t pay.
Labour hire carries its own exposure. In a triangular arrangement, where an agency employs the worker and another business directs the day-to-day work, Employment New Zealand says the worker can raise a personal grievance against the employer, the third party or both.
Its guidance for directors suggests asking whether suppliers must tell you if the Labour Inspectorate, ERA or Employment Court investigates them, and whether your recruitment process checks if a worker paid a premium to get the job. Both stand-down lists are public, so a labour-hire firm or subbie can be checked against them before they come on site.
Tougher penalties are also in the pipeline, but they aren’t law yet. The Immigration (Enhanced Risk Management) Amendment Bill would raise the maximum prison sentence for migrant exploitation from seven to 10 years. It would add infringement offences for employers who give incorrect or incomplete information or fail to provide employment documents when asked, and give MBIE longer to issue fines for certain employer offences.
The Education and Workforce Committee reported the Bill back on 7 August 2026 and recommended by majority that it pass. It also recommended lifting the maximum penalty for charging a premium for employment to 10 years, in line with the exploitation offence. The Bill still needs its second and third readings.
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