Independent contractor arrangements have had a legal shake-up under the Employment Relations Amendment Act 2026. From 21 February 2026, New Zealand has a new “gateway test” to help determine whether someone is a genuine contractor rather than an employee.
Why does this matter?
Because contractor status has traditionally lived in a grey area. The new gateway test gives businesses a clearer pathway by setting out a statutory checklist for engaging genuine contractors.
In simple terms, if all of the required criteria below are met, the worker will be treated as a contractor and will not be able to bring a claim arguing they are actually an employee.
Criteria
- There is a written agreement that states the worker is an independent contractor; AND
- The worker has freedom to work for others (note that a worker working full time hours for a principal will not necessarily amount to a restriction on working for others); AND
- The worker is not required to be available at set times, OR they have the ability to subcontract; AND
- The arrangement does not end solely because the worker declines additional work; AND
- The worker had reasonable opportunity to get independent advice before signing.
The details matter
For example, it is not enough for an agreement to simply say a contractor can work for others if, in reality, the hours or working arrangements effectively prevent them from doing so.
If the arrangement does not meet the gateway test, all is not necessarily lost. The usual common law test will still apply, meaning the Employment Relations Authority or Court may look beyond the label and examine the real nature of the relationship.
The gateway test is also not retrospective, so any arrangements that started before 21 February 2026 may need careful handling, particularly where there is any question about the worker’s status before the new law came into effect.
What does this mean for you?
Contractor agreements should not be left sitting in the bottom drawer gathering dust.
If your business engages contractors, now is the time to check whether your agreements and the actual working arrangements line up with the new law.
Call us now for a review.
