The Employment Relations Amendment Act 2026 received Royal Assent on 20 February 2026 and came into force the following day. It is the most significant change to New Zealand employment law in years, and several of its provisions materially shift the balance in disputes.
The contractor gateway test
The Act introduces a statutory gateway test determining when a worker is a “specified contractor” and therefore excluded from the definition of employee.
Where all five criteria are met, the worker cannot bring an employment status claim to the Employment Relations Authority:
- A written agreement specifying the worker is an independent contractor.
- The worker is not restricted from working for others, except while actually performing work for the contracting party.
- The worker is not required to be available at set times, or has the ability to subcontract the work.
- The arrangement does not end solely because the worker declines additional work.
- The worker had a reasonable opportunity to seek independent advice before entering into it.
This is a real change. The previous position was that status turned entirely on the substance of the relationship, assessed after the fact, with the written label carrying little weight. An arrangement now meeting all five criteria has protection from a status challenge.
The criteria are cumulative. Missing one takes the arrangement outside the gateway and the traditional analysis applies — control, integration, economic reality, ability to work for others, equipment, substitution.
Note the scope. The gateway concerns status under the Employment Relations Act. It does not change tax treatment, health and safety duties, or obligations under other legislation.
The $200,000 threshold
Employees whose annual remuneration meets or exceeds the specified threshold — set at $200,000 — may not pursue a personal grievance for unjustified dismissal or unjustified disadvantage.
For employers of senior staff this changes the risk profile of a termination substantially. For senior employees it changes what to negotiate at the point of hire, since contractual protections become the only protections.
Remedies where the employee contributed
The most consequential change for ordinary disputes.
Serious misconduct. Under new section 123B, where an employee’s actions contributed to the situation giving rise to the grievance and those actions amount to serious misconduct, the Authority or Court must not provide any remedy at all. Not reduced — none.
Contributory conduct short of serious misconduct. Reinstatement and compensation for injury to feelings or loss of benefits are no longer available where the employee contributed, and remedies can be reduced by up to 100 percent.
Previously an employer who ran a flawed process could face substantial remedies even where the employee had behaved badly. That is no longer the position.
Union and collective provisions
The 30-day rule has been removed for workplaces with collective employment agreements. Under that rule, a new employee’s terms had to reflect the collective agreement for their first 30 days.
Employers are now required to inform non-union employees about their eligibility for collective agreements and union membership within the first 30 days of employment.
What this does not change
Process still matters. A dismissal must still be substantively justified and procedurally fair, assessed against what a fair and reasonable employer could have done. Where there is no contributory conduct, the full range of remedies remains available.
The changes reduce exposure where an employee behaved badly. They do not protect an employer who dismissed someone unfairly for no good reason.
What employers should do
- Review contractor arrangements against the five gateway criteria. Several common arrangements fail criterion two or three — exclusivity, or required availability without a right to subcontract.
- Update contractor agreements so the written terms and the actual practice both satisfy the gateway.
- Give genuine opportunity for independent advice before signing, and record that you did. That is a gateway criterion, not a courtesy.
- Update your employment agreement templates for the union information obligation.
- Review senior employment agreements above the threshold, where contractual terms now carry more weight.
Employment New Zealand publishes guidance on the changes, and the Act itself is available free at legislation.govt.nz — there is no copyright in the official text of New Zealand legislation, so it can be read and quoted directly.
Act in force 21 February 2026. General information only, not legal advice — take advice on specific arrangements.
