If you employ staff in New Zealand, it’s important to understand the key differences between full-time, part-time, casual and fixed-term employment. Each type has its own legal obligations and entitlements under the Employment Relations Act and the Holidays Act, and getting it wrong can create compliance and payroll headaches later.
Let’s break down the main types of employment in simple terms.
Full-Time Employment
Full-time employees usually work around 35 to 40 hours a week on a regular and ongoing basis.
Their employment is permanent, meaning there’s no fixed end date, and they’re entitled to the full range of employment benefits such as:
Four weeks’ annual leave per year after 12 months of continuous employment
Sick leave (10 days per year after six months of continuous work)
Public holidays, parental leave, and other statutory entitlements
Because their hours and income are predictable, they’re generally the most stable members of your workforce.
Part-Time Employment
Part-time employees also have permanent employment, but they work fewer hours than full-time staff, for example, three days a week or a set number of hours per day.
They’re entitled to the same benefits as full-time employees, just on a pro-rata basis.
For example, if someone works 20 hours a week (half of a standard 40-hour week), they’ll earn half the annual leave entitlements of a full-time employee. The key feature of part-time work is consistency, the hours and days are usually regular and agreed in advance.
Casual Employment
Casual employees are used when you don’t know exactly when or how often you’ll need someone. There’s no guaranteed pattern of work, and both the employer and employee can decline or accept shifts as they arise.
Because casual employees have no ongoing commitment to work, they don’t build up annual leave. Instead, they’re usually paid 8% holiday pay with each pay cycle (this must be clearly stated on the payslip).
Casuals should be used only when the work is genuinely irregular or intermittent, if the work becomes regular or predictable, the role might actually be part-time, not casual.
Fixed-Term Employment
Fixed-term employees are employed for a specific period of time or a specific project, for example, covering parental leave, seasonal work, or a short-term project.
This arrangement must:
Have a genuine reason for being fixed-term (you can’t use it just to “try someone out”), and
Clearly state in the employment agreement the reason and when and why the employment will end.
At the end of the term, the agreement simply expires, there’s no need for notice or redundancy. However, if the work continues beyond the end date, the employee may automatically become permanent.
Why It Matters
Choosing the right employment type helps ensure:
You’re compliant with employment law
Employees are paid and treated fairly
Everyone understands what to expect
Getting advice before you draft or issue employment agreements can save you time, stress and potential disputes later.
If you’d like help reviewing your current agreements or making sure you’re classifying your team correctly, proHR can help.
