The New Gateway Test: What NZ Employers Need to Know About Worker Status

The Gateway Test for Contractors in New Zealand: What You Need to Know

Why this matters

When you engage contractors – or work as one – it’s critical to understand how the relationship is viewed under the law. The line between “employee” and “contractor” has become less clear, especially with flexible and gig-economy arrangements. According to Beehive.govt.nz, the proposed Gateway Test is designed to bring greater clarity and certainty for both contractors and the businesses that engage them.

The Government has announced upcoming changes to the Employment Relations Act 2000 to introduce a Gateway Test which will help clarify when a worker is genuinely a contractor rather than an employee. 

In essence: if a working arrangement meets the criteria laid out in the test, the worker will be treated as a contractor. If not, the traditional test continues to apply. 

What are the criteria?

According to the official announcement on Beehive.govt.nz, the Gateway Test includes a set of specified criteria. These include:

• A written agreement with the worker that specifies they are an independent contractor. 

• The worker is not restricted from working for other businesses (including competitors). 

• Either:

  • The worker is not required to be available at specified times/days or for a minimum number of hours, or

  • The worker is able to subcontract the work. 

• The business does not terminate the contract if the worker declines an additional task or engagement.

• The worker must be given a reasonable opportunity to seek independent advice before entering the contract.

If all the criteria are met, the arrangement may be treated as contracting rather than employment. If any one of them is not met, then the arrangement may be subject to the “real nature of the relationship” test. 

Why this change is being introduced

• To give greater certainty for businesses and contractors from the outset of their engagement. 

• To help businesses who rely on contracting arrangements — including more flexible, modern work-models — operate with clarity. 

• To reduce costly disputes over worker status. 

What this means for contractors and businesses

For businesses:

• Review your contractor engagements: do they meet the criteria above?

• Make sure your contracts clearly reflect the relationship as intended.

• Ensure practice aligns with what the contract says.

• Take note: the law has not yet fully changed, but preparing now can reduce future risks.

For contractors:

• Check your agreement: does it recognise you as an independent contractor?

• Are you free to work for other clients/businesses?

• Are you able to subcontract work or control how you perform it (or is the business imposing strict availability/timeframes)?

• If your arrangement doesn’t meet these criteria, you may be at risk of being treated as an employee under the law.

Practical checklist

• Written contract specifying contractor status

• Freedom for the worker to take on other clients/businesses

• Flexibility of hours or ability to subcontract

• The business does not end the contract if an extra task is refused

• Evidence that the worker had a chance to obtain independent advice

• Practice aligns with the written agreement

What to watch for next

The Bill to implement the Gateway Test has been introduced (or is expected) in the coming years and will be part of the Employment Relations Amendment Bill.
Keep an eye on official updates from Beehive.govt.nz and the relevant legislation.

Final thoughts

The proposed Gateway Test offers a promising path toward clearer, fairer contractor-engagement practices in New Zealand. For both contractors and the businesses they work with, now is a smart time to review arrangements, ensure documentation and actual practice align, and prepare for a future in which classification rules are more clearly defined.