Are 360,000 workers quietly building a wage liability on your books?

A cost that never hits the ledger

If you run a business and your labour budget is built on paid hours, there’s a decent chance it’s wrong. The Employment New Zealand Employment Monitor 2025 found 49% of workers now report at least one employment concern, up from 45% the year before. Hours-related issues – working longer than agreed or not being paid for all hours worked – affect 16% of the workforce, up from 15%.

Scale that against the 2.27 million filled jobs Stats NZ counted in the June 2026 quarter and you get roughly 360,000 workers carrying hours-related concerns at any given time. The concerns cluster where you’d expect the labour is hardest to track – 64% among health and aged care workers, 59% among 18 to 29 year olds.

This is the part that should worry decision-makers. Official earnings data captures none of it. Stats NZ reports average weekly earnings including overtime for full-time-equivalent employees rose to $1,716 in the March 2026 quarter, up from $1,666, with all salary and wage rates including overtime up 2.0% over the quarter. But that figure only measures hours that were actually paid. The Quarterly Employment Survey records average paid hours by industry – 41.84 in forestry and mining, 32.38 in health care and social assistance, 25.49 in accommodation and food. Paid hours. Not worked hours.

The gap between the two is where the risk lives.

What flying blind actually costs

When a meaningful share of worked hours goes unrecorded, three things go wrong at once. Your true labour cost per unit of output is understated, so your productivity numbers flatter reality. Your cost-per-hour budgeting is built on a false denominator. And your legal exposure compounds invisibly, because arrears don’t announce themselves until an inspector or a personal grievance does.

Enforcement is landing real penalties. Health sector businesses were ordered to pay more than $147,000 in worker arrears, and in one Auckland case migrant workers were found to have worked up to 90 hours a week while being paid for 30. Those are extreme examples, but they sit at the far end of the same spectrum most employers are exposed to in milder form – unrecorded overtime, blurry agreements about what counts as work, timekeeping that runs on trust rather than data.

Financial stress is now a performance problem

The downstream damage doesn’t show up on a payroll report either. A Gallagher Workplace Wellbeing Index survey of 3,598 employees across Australia and New Zealand found nearly two-thirds of New Zealand employees are struggling financially. One in three has taken on a second job, more than a quarter are always or often distracted at work by money worries, one in three goes to work unwell because they can’t afford not to, and 26% report burnout, concentrated among younger workers.

Silvia Pothoven, head of corporate benefits for Gallagher’s Benefits and HR Consulting Division, said financial stress “has traditionally been viewed as a personal issue, but the research suggests employers may be underestimating its impact on workforce performance.” The fatigue and distraction show up as safety and performance issues – costs that are real but never coded as labour cost.

The fix is cheaper than the exposure

The encouraging part is that none of this requires deep pockets to address. Better timekeeping systems, clearer employment agreements on overtime expectations, and benefits aimed at actual pressure points rather than perks are all within reach.

A Cultivate survey of 1,003 employed New Zealanders found only one in five say their employer benefits hit the mark. Co-CEO Tony Pownall said “a lot of what they do spend is aimed at the wrong target,” and flagged a lever most employers overlook – “a fifth week of leave costs around 2% of salary, and unlike a pay rise it doesn’t lift the base every future increase is calculated from.” His co-CEO Trina Jones was blunter – “a benefit that gives you time back with your family, or takes a cost off your plate, lands very differently to a gym discount.”

With seasonally adjusted filled jobs up just 0.1% in the June quarter, workers can’t easily walk away from bad situations, which masks the retention risk for now. That’s temporary. The employers who close the gap between paid and worked hours – and spend their benefits budget where it actually bites – will be the ones not writing arrears cheques when the labour market loosens.

Sources

• Financial stress is quietly undermining New Zealand workplaces (2026-09-22)
• Employment Monitor Report 2025 (2025-06-10)
• Labour market statistics: March 2026 quarter (2026-05-06)
• Business employment data: June 2026 quarter (2026-09-08)
• Average weekly paid hours for employees in New Zealand (2026-08-05)
• Health businesses ordered to pay more than $147,000 in worker arrears
• Migrant workers forced to work up to 90 hours a week but paid for just 30 at Auckland eatery