The Employment Relations Amendment Act 2026 gives businesses something they have not had before: a way to structure a contracting arrangement that is protected from an employment status challenge.
Getting there requires meeting all five gateway criteria. Most existing arrangements fail at least one.
Criterion one: a written agreement
There must be a written agreement specifying the worker is an independent contractor.
Straightforward, and the most commonly missing element in small business arrangements where work started on a handshake. A verbal contracting arrangement, however genuine, is outside the gateway.
Note that a written agreement alone was never sufficient under the old law and is not sufficient now. It is one of five.
Criterion two: not restricted from working for others
The worker must not be restricted from working for others, except while actually performing work for the contracting party.
This is where exclusivity arrangements fail. A clause requiring the contractor to work only for you, or restricting them from working for competitors during the term, takes the arrangement outside the gateway.
The carve-out is narrow — you can require them not to be doing someone else’s work while performing yours, which is ordinary. You cannot restrict them generally.
Practical implication: review any exclusivity or non-compete clause in your contractor agreements. Many were included as standard drafting without anyone considering whether they were necessary.
Criterion three: availability or substitution
The worker must not be required to be available at set times, or must have the ability to subcontract the work.
This is an either/or, which gives flexibility. An arrangement requiring set hours can still meet the gateway if the contractor can send someone else.
Where businesses fail this: requiring a contractor to be available during specified hours and requiring the work to be performed personally. That combination looks like employment and now falls outside the gateway explicitly.
If your operation genuinely needs someone available at set times, a right of substitution is the route through — and it must be real rather than theoretical.
Criterion four: declining work does not end the arrangement
The arrangement must not end solely because the worker declines additional work.
This targets the pattern where a contractor is nominally free to refuse work but understands that refusing means no further offers.
Practical implication: if your practice is to stop offering work to contractors who decline, that practice takes you outside the gateway regardless of what the agreement says. The criterion concerns the arrangement, not just the document.
Criterion five: reasonable opportunity for independent advice
The worker must have had a reasonable opportunity to seek independent advice about the arrangement before entering into it.
Familiar from trial periods, where the equivalent requirement is regularly failed. Reasonable opportunity means genuine time and a genuine suggestion — handing someone an agreement and asking them to sign it on the spot does not qualify.
Record that you gave it. An email attaching the agreement, recommending independent advice, and allowing several days creates the evidence.
Where common arrangements sit
Labour-only subcontractors in construction frequently fail criteria two and three — working exclusively for one builder, on their sites, at set times, personally.
Owner-drivers frequently fail criterion two or four, where exclusivity is expected in practice and declining runs affects future work.
Long-term consultants working full-time for one client often fail criterion two.
Platform-based work depends entirely on the specific arrangement, and the criteria give a clearer framework than existed before.
What the gateway does not cover
It concerns employment status under the Employment Relations Act. It does not change:
- Health and safety duties, which do not turn on employment status. Where more than one PCBU has a duty over the same matter, each must consult, cooperate and coordinate.
- Tax treatment, including schedular payment withholding, which has its own tests.
- Obligations under other legislation.
A business that meets the gateway still holds health and safety duties toward the contractor for work it influences, and still needs to get the tax position right.
If you cannot meet the gateway
That is not fatal — it means the traditional substance test applies, assessing control, integration, economic reality, ability to work for others, equipment and substitution.
The question then becomes whether the arrangement genuinely is contracting. If it is not, the answer is to employ the person rather than to paper over it, because the retrospective liability — PAYE, holiday pay, KiwiSaver, minimum wage shortfall — is calculated across the whole relationship.
Employment New Zealand publishes guidance on employment status, and the Employment Relations Amendment Act 2026 is available free at legislation.govt.nz with no copyright in the official text.
Act in force 21 February 2026. General information only, not legal advice — take advice on specific arrangements.
