New Zealand employers are dealing with several substantial employment law changes with different effective dates. Keeping them straight matters, because acting on a change that has not commenced is as much a problem as missing one that has.
In force now: Employment Relations Amendment Act 2026
Royal Assent 20 February 2026, in force 21 February 2026.
- Contractor gateway test — five cumulative criteria. Where all are met, the worker is a “specified contractor” and cannot bring an employment status claim.
- $200,000 threshold — employees at or above that remuneration cannot pursue unjustified dismissal or unjustified disadvantage grievances.
- Remedies where conduct contributed — serious misconduct removes remedies entirely under new section 123B; lesser contributory conduct removes reinstatement and compensation for injury to feelings or loss of benefits, with reductions up to 100 percent.
- 30-day rule removed for workplaces with collective agreements.
- Union information obligation — non-union employees must be informed about collective agreement eligibility and union membership within their first 30 days.
Action now: review contractor agreements and practice against the gateway; update onboarding for the union information obligation; review senior agreements above the threshold; make sure disciplinary investigations produce a documented record, since remedies now turn on establishing contributory conduct.
In force now: KiwiSaver rate
The default employee and employer contribution rate rose from 3 percent to 3.5 percent on 1 April 2026, with a further increase to 4 percent on 1 April 2028.
Employees can apply to Inland Revenue for a temporary rate reduction back to 3 percent, lasting three to twelve months and renewable.
Action now: confirm payroll is applying 3.5 percent. Businesses on older or manual systems should check rather than assume — a quiet under-contribution since April is an arrears problem plus interest.
Passed, commencing 2028: Employment Leave Act
Parliament has repealed the Holidays Act 2003 and passed the Employment Leave Act, moving annual and sick leave to hours-based accrual.
- Annual leave accrues at a minimum 0.0769 hours per standard hour worked, from the first day.
- Sick leave accrues at a minimum 0.0385 hours per standard hour, from the first day, capped at 160 hours. The six-month wait disappears.
- Balances are held in hours and are not recalculated when standard hours change.
- A 12.5 percent upfront leave compensation payment replaces accrual on casual and additional hours.
- Annual leave accrues during paid statutory leave, parental leave, volunteer leave and jury service; not during unpaid leave or ACC compensation.
A two-year implementation applies. Until then the Holidays Act 2003 continues to apply in full, including existing calculation obligations and any remediation liability.
Action now: talk to your payroll provider about their implementation timeline. Cloud providers will handle most of it; older or in-house systems face a genuine project. Resolve known Holidays Act calculation issues rather than assuming the new Act writes them off.
The recurring compliance failures
Independent of the changes, the same errors keep appearing:
- Holiday pay on variable earnings. Annual leave must be paid at the greater of ordinary weekly pay and average weekly earnings. Employers paying only ordinary pay underpay anyone with overtime, commission or allowances. This is the largest source of remediation liability in New Zealand.
- Wrong ESCT rate on employer KiwiSaver contributions, particularly after a pay change.
- Trial periods signed after the first day of work, which invalidates them entirely.
- Deductions without specific written consent.
- Missing wage and time records, which are a legal requirement and the evidence in any dispute.
A practical annual check
Once a year, sample a few employees across different pay patterns and recalculate their leave payments manually. Confirm ESCT rates. Check allowances are treated correctly. Verify payday filing is completing.
Errors found early cost a correction. Errors found in year five cost a remediation project plus interest.
Employment New Zealand publishes guidance on all of these and free agreement builders, Inland Revenue publishes KiwiSaver and payroll material, and the Acts are available free at legislation.govt.nz with no copyright in the official text.
Dates as at August 2026. Confirm current requirements with Employment New Zealand. General information only, not legal advice.
