KiwiRail is asking the Chinese company it contracted to decontaminate asbestos-tainted trains how much it's paying its workers.
It has been claimed that 38 Chinese railway engineers based in Wellington and Picton and working for the company CNR, which sold KiwiRail the trains, are being underpaid.
KiwiRail general manager of external relations, Deb Hume, said today it would be very concerned if workers were being paid as low as $3 an hour, as claimed by Hutt South Labour MP Trevor Mallard.
Mr Mallard says he has been told that 17 workers were getting far less than the minimum wage.
"There are two different figures that I've heard - one is a $US40 a day amount, and the other is $NZ3 an hour. Now these are a little bit apart, but I understand the workers sometimes are working up to 10-hour days."
Mr Mallard said he had also heard that the workers are living in cramped conditions, all in the same Hutt Valley house.
Rail and Maritime Transport Union acting general secretary Todd Valster says it warned KiwiRail several weeks ago of possible exploitation of Chinese workers.
KiwiRail says the contract it entered into with a Chinese company to decontaminate asbestos tainted trains stipulated that New Zealand labour laws must be followed.
Deb Hume told Radio New Zealand's Checkpoint programme that KiwiRail is speaking to CNR about the claims, and accepted that KiwiRail should have checked the contract conditions were being met.
The Ministry of Business, Innovation and Employment is looking into the accusations.
Employment lawyer Andrew Scott-Howman says KiwiRail is allowed to assume New Zealand labour laws are being followed, but it would be in an awkward position if it was proven that it was aware labour laws were being breached.
At the least, KiwiRail would have been expected to raise the matter with the contractor or a labour inspector, he said.
Listen to Checkpoint interview with Deb Hume