Posted on February 27, 2026
This is the second in our series of updates on the significant changes to New Zealand’s employment laws, brought about by the introduction of the Employment Relations Amendment Bill, which became law on 21 February 2026. While these changes are controversial and ripe for repeal if there is a change of government in November, the steps employers can take now will continue to remain helpful regardless.
Details and implications of the long-awaited contractor gateway test, are set out below.
| Change | When? | What do employers need to know? | What should employers do now? |
| A person will be a “specified contractor” and exempt from the definition of employee under section 6 of the Employment Relations Act (Act) if: • There is a written contract that says the person is an independent contractor or not an employee. • There is no restriction on working for others (except while working for the company, which can be fulltime work). • There is no requirement to work/be available at a certain time or the person is allowed to sub-contract the work to another person. • The contract does not terminate if the person declines additional work offered. • The person has a reasonable opportunity to get advice before they sign the contract. | 21 February 2026 for anyone who meets the test, including for existing contracts. This is subject to any status proceedings brought before or after 21 February 2026 in respect of a contractor arrangement preceding that date. | The test will not work for companies who need contractors to work on certain days or times and who don’t allow sub-contracting/need the right to veto any sub-contractor. This is likely to limit the pool of eligible relationships. If parties do not meet the test, a person will not automatically be an employee. The section 6 test will still apply i.e. the “real nature of the relationship” looking at control, integration, and economic independence will be applied. Some vetting of sub-contractors will be allowed when looking to pass the gateway test, but only to check compliance with statutory requirements (e.g. a valid driver’s licence for a driver), qualification and criminal record checks if relevant to the work. The carve out for status proceedings for contractor arrangements before 21 February 2026 could lead to the somewhat strange situation where a person with the same contract terms could be classified as an employee before the law change and a contractor after the law change. A good example of this are the Uber drivers who were recently held to be employees by the Supreme Court. Their arrangements would now pass the test to make them specified contractors from 21 February 2026. | There are major questions to be answered about how the test will be interpreted by the ERA and Employment Court. Employers should seek advice on: • Whether their contractor arrangements meet the test. • How to amend/draft contracts to include necessary clauses and ensure standard clauses (e.g. a non-compete restraint) do not invalidate the test. |
