An employment law specialist says labour inspectors are failing to actively ensure employers pay the legal minimum wage, allowing thousands of migrant workers to be underpaid.
The Business, Innovation and Employment Ministry received 593 complaints last year about employees being paid less than the minimum wage - of which almost half were upheld.
Most of those not upheld were voided when the employer voluntarily paid up or went out of business.
Employment law expert Max Whitehead says he is contacted every day by immigrants, but most are too scared to make a formal complaint.
He says the ministry is partly to blame as it takes months for it to take any action.
Mr Whitehead says inspectors should be actively ensuring employers follow the law.
"These are the policemen of our labour laws, and they're not policing, they're reacting."
Mr Whitehead says they should be calling in on employers and checking they are complying with the law.
He says everyone is affected because of the loss of taxes and the migrants' poor living conditions.