There has been a lot happening in New Zealand employment law recently, with a number of significant changes either already in force or on the horizon.
For employers, it can be difficult to keep track of what has changed, what is still coming, and what needs to be done about it.
Here is a quick snapshot of some of the key changes employers should have on their radar.
The Holidays Act is being replaced
One of the biggest changes is the replacement of the Holidays Act 2003 with the new Employment Leave Act 2026.
The new Act has now been passed and will come into force on 6 August 2028.
It will significantly change the way annual leave and other forms of leave are earned, taken and paid, including annual leave, sick leave, bereavement leave, family violence leave, public holidays and alternative leave.
There is a two year implementation period to give employers and payroll providers time to prepare.
Importantly, the current Holidays Act continues to apply until August 2028, so employers should not start applying the new rules early.
Over time, employers will need to consider the impact on payroll systems, employment agreements, workplace policies and existing leave arrangements.
Changes to personal grievances for high income employees
Changes to the Employment Relations Act have introduced a new $200,000 annual remuneration threshold for unjustified dismissal claims.
Employees earning $200,000 or more under new employment agreements are no longer automatically able to raise a personal grievance for unjustified dismissal or unjustified disadvantage relating to their dismissal.
Employers and employees can, however, agree in writing that dismissal protections will continue to apply.
Transitional provisions apply to existing employment agreements, so this is an area employers with highly paid employees should be reviewing carefully.
Employee conduct can have a greater impact on remedies
There have also been changes to the way remedies are dealt with where an employee's own behaviour has contributed to the situation giving rise to a personal grievance.
The Employment Relations Authority and Employment Court are now required to reduce or, in some circumstances, remove certain remedies where the employee has contributed to the grievance.
This does not remove the need for employers to follow fair and reasonable employment processes, but it does change the potential consequences where an employee's own conduct has materially contributed to the situation.
New contractor gateway test
The law around whether someone is genuinely an independent contractor or an employee has also changed.
A new gateway test has been introduced. Where all of the statutory criteria are satisfied, a worker will be treated as a specified contractor.
Where the gateway test is not met, the existing legal test for determining employment status continues to apply.
Businesses using contractors should ensure their contractor arrangements reflect how the relationship actually operates in practice rather than relying simply on the label contained in the agreement.
Changes for workplaces with collective agreements
The previous requirement for a new employee whose work is covered by a collective agreement to initially be employed on the collective terms for their first 30 days has been removed.
Employees can now agree to an individual employment agreement from the outset or choose to join the relevant collective agreement.
There have also been changes to some of the associated onboarding requirements.
Employees discussing their pay
Another relatively recent change that employers should be aware of relates to pay transparency.
Employees now have legal protection when discussing or disclosing their remuneration. Employers cannot take adverse action against an employee because they have discussed their pay, asked another employee about their pay, or participated in a discussion about remuneration.
This means employers should be particularly careful about older employment agreement provisions or workplace practices that seek to prevent employees from discussing what they are paid.
What should employers do now?
There is no need to panic or rewrite every employment document overnight.
However, with a number of employment law changes taking effect over a relatively short period, it is a good time for employers to make sure their employment agreements, policies, contractor agreements and HR processes remain current.
The new Employment Leave Act in particular will require significant preparation before it takes effect in 2028, and more detailed implementation guidance is expected to be released over the coming months.
Watch this space
We will be providing further updates and practical guidance on these changes and what they mean for employers.
In the meantime, if you are unsure whether your employment agreements, policies or employment practices are up to date, give us a call. We can help you understand what has changed, what applies to your business, and what you need to do next.