Changes to New Zealand's employment law that took effect on 21 February 2026 have introduced a new statutory gateway test for determining whether certain workers are independent contractors.
The aim of the changes is to provide greater certainty for businesses that engage genuine independent contractors. If the gateway test is met, the worker will generally be treated as a contractor under the Employment Relations Act, reducing the uncertainty that has previously existed around contractor status.
However, the changes don't mean every worker engaged as a contractor will automatically be considered one. Businesses still need to ensure their contracting arrangements meet the legal requirements and accurately reflect how the working relationship operates in practice.
What changed?
The new law introduced a statutory gateway test. To qualify, all of the required criteria must be met.
These include that:
• there is a written agreement stating the worker is an independent contractor
• the worker is free to work for other businesses, including competitors
• the worker can either choose when they work, decline additional work, or subcontract the work, depending on the arrangement
• the business cannot terminate the agreement simply because the contractor refuses work beyond what they have agreed to undertake.
If all of these requirements are satisfied, the worker will generally be treated as an independent contractor for the purposes of the Employment Relations Act.
If one or more of the requirements are not met, the gateway test does not apply and the contractor's status will need to be assessed under the existing legal principles.
What does this mean for employers?
The changes provide greater certainty for businesses engaging genuine contractors, but they also reinforce the importance of ensuring contractor agreements are properly drafted and accurately reflect the way the relationship operates.
If you're engaging contractors and you're unsure whether your current arrangements meet the new legal requirements, or you would like advice on how the changes apply to your business, it's worth seeking guidance sooner rather than later. Addressing any issues early can help reduce risk and provide confidence that your contractor relationships are structured appropriately.
If you'd like to discuss your contractor arrangements or understand how the new rules apply to your business, get in touch with the team at proHR. We're here to help you navigate the changes with confidence.