Engaging a consultant, contractor engineer or specialist adviser is the most obviously genuine form of contracting. It can still fall outside the statutory gateway, usually for reasons nobody intended.
Where professional engagements fail the gateway
Under the Employment Relations Amendment Act 2026, all five criteria must be met for “specified contractor” status. For consultants the risk points are:
Exclusivity. A consultant working full-time on one client’s project for an extended period, with a clause preventing other work, fails criterion two. The restriction can only apply while actually performing your work.
Set availability without substitution. Requiring someone on site or available during business hours, with the work to be performed personally, fails criterion three. Professional services frequently require the named individual, which means the availability requirement needs to go instead.
Independent advice opportunity. Sending an engagement letter and asking for it back the same day does not satisfy criterion five.
Scope is the other half of the problem
Independent of employment status, most consultancy disputes come from scope that was never defined. A usable engagement covers:
- Deliverables, in what form and at what stage.
- An explicit exclusions list, which is more valuable than the inclusions list because it captures what the client assumed was included.
- Assumptions, including information relied on from others.
- Revisions included before variation applies.
- Fee basis and how variations are agreed.
- Liability cap.
- Who may rely on the documents, and for what purpose.
For engineering engagements specifically
Producer statements must be addressed at engagement. The recurring pattern is an engineer engaged for design, then asked at completion for a PS4 covering construction they never monitored.
A PS4 asserts that construction monitoring was carried out and the work accords with the design. Issuing one without having done the monitoring is a disciplinary matter and creates liability far exceeding the fee.
State explicitly whether monitoring is in scope, at what level, and that a producer statement follows only if that monitoring occurs. Clients declining to pay for monitoring should understand at the outset what does not follow.
Professional indemnity
Operates on a claims-made basis — the policy in force when a claim is notified responds, not the one in force when the work was done.
Two consequences: continuous cover matters, and run-off cover after ceasing practice matters, because the Building Act long-stop limitation period means work done today can be examined many years later.
Where you engage a consultant, require evidence of current cover at a limit appropriate to the exposure rather than to the fee. Losses relate to the project.
Intellectual property
Work created by a contractor frequently belongs to the contractor unless the agreement says otherwise. Assignment of copyright must be in writing to be effective.
For design, software, drawings and reports this matters commercially. Address it before work starts, and be specific about whether the client gets ownership or a licence, and for what uses.
Health and safety still applies
Meeting the gateway does not reduce duties. Where a consultant attends your site, or where their design influences how work is done, overlapping duties apply and each PCBU must consult, cooperate and coordinate.
For designers this includes designing so the thing can be built, maintained and eventually removed safely — a duty that sits with the designer regardless of contractual arrangement.
Tax
A separate question from employment status. Schedular payment withholding applies to certain contractor payments, and for non-resident consultants, withholding may apply to services performed in New Zealand.
Budget 2026 proposed a single-payer approach for non-resident contractor tax, meaning a business would only need to consider its own contract rather than the contractor’s wider New Zealand activity. That remains subject to legislation.
Practical checklist
- Written agreement, sent in advance with a recommendation to take advice.
- No exclusivity beyond the period of actually performing your work.
- Substitution right, or no set availability requirement.
- Scope with explicit exclusions.
- Producer statements and monitoring addressed expressly, where relevant.
- Liability cap and evidence of current professional indemnity.
- IP assignment in writing.
- Health and safety cooperation obligations.
Employment New Zealand publishes guidance on employment status, Engineering New Zealand publishes model terms of engagement for members, and the Act is available free at legislation.govt.nz.
Act in force 21 February 2026. Budget 2026 measures remain subject to legislation. General information only, not legal advice.
