The owners of an island-style clothing store systematically underpaid two migrant workers below the minimum wage for years, intentionally keeping false wage and time records to dupe authorities.

Damyanti and Prakash Narsey, a married couple now in their 60s, also did not give the workers sick leave, paid annual leave or public holiday pay.

The Fiji Indian couple owned and ran the now wound-down House of Island Style in Ōtāhuhu, Auckland.

Labour inspectors said they kept a false book of wage and time records for the two workers to make it look like they were part-timers who only worked nine hours a week.

But the couple kept a second notebook at home that showed the workers actually worked some 20 hours per week on average and were paid well below the minimum wage.

The two workers were also Fiji Indian, highlighting what the Labour Inspector called an "inherent inequality of power".

Ministry of Business, Innovation and Employment Labour Inspectorate national manager Stuart Lumsden said MBIE was "really concerned about the amount of migrant exploitation we're seeing".

"It's a reputational issue," he told Open Justice. "We can't afford to be seen to have migrant exploitation, particularly when it's difficult to get labour in New Zealand."

The two workers in this case had reason to expect better treatment by people who shared linguistic and cultural ties, the Employment Relations Authority said in its decision released today.

But its records were "replete of cases where sadly that is not so".

Investigations showed the employees were paid $13 an hour in cash for hours above the nine officially recorded, a shortfall of $4.70 below minimum wage at the time.

MBIE was tipped off about the case in December 2019. A member of the public complained, saying a worker looked unhappy at the shop and told them they were not paid the minimum wage or holiday pay.

Labour inspectors visited the store in January 2020, and the couple at the store told them their two employees were part-timers and were not entitled to sick leave.

The couple showed the inspector the book of false records at first, but after further questioning, admitted in March they had a second notebook at home showing the true picture of how much the two employees worked.

One of the workers told the inspector she had never taken sick leave but had gone to work sick.

Each employee was owed between $11,540 and $11,810 for work over six years, between 2015 and 2020.

They were also owed a combined total of $7130 for public holidays and another $11,200 for annual leave.

The store owners had failed to pay the employees for public holidays that were otherwise a working day for them, and only paid three weeks annual leave as opposed to the required four.

The total arrears amounted to more than $41,680, which the owners paid up "within a matter of days" to the two workers after receiving the labour inspector's report in July 2020.

The couple tried to blame a former accountant for what they called employment and tax "guidance".

The Authority threw that out, saying that keeping two books of wage and time records allowed the business owners to maximise profit and minimise wage bills and tax liabilities.

"The breach was neither inadvertent nor negligent but intentional," Authority member Peter Fuiava said in his decision.

The couple also said they had a "great relationship" with their employees that would have continued if they did not close the clothing business.

But the Authority said there were "multiple and sustained breaches of employment standards" for a clear majority of the workers' time at the business.

The Authority fined the couple $15,000 each for breaching the Minimum Wage Act and the Holidays Act. Another owner of the store was fined $30,000.

Lumsden said employers often threatened the migrant with deportation, threatened not to support their visa applications, or even charged a premium for those visas even though they did not have the power or authority to do that.

"It's a breach," he said. "It is not worth getting those few extra dollars because we will do our best to recover arrears for the migrants, and we will seek penalties for the breaches."