Important Update: Employment Relations Act Amendments Now Law

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

The Government’s Employment Relations Amendment Act 2026 has now received Royal Assent and is now in law, introducing significant changes to New Zealand’s employment law framework.

What’s Changed? – Key Reforms

1. New Contractor “Gateway Test”
A clear statutory test has been introduced to define when a worker is a genuine independent contractor. If all specified criteria are met — including a written agreement, freedom to work for others, lack of fixed hours, and a real opportunity to seek independent advice before signing — a worker will be deemed a “specified contractor” and excluded from being classified as an employee under the Act.

Why this matters:
This aims to reduce disputes over employment status and provide greater certainty for businesses engaging contractors.

2. Changes to Personal Grievance Remedies
The way personal grievance remedies are determined has been overhauled:

• Serious misconduct by an employee that contributes to the grievance will now mean no remedies (including compensation or reinstatement).

• Remedies can be reduced by up to 100% where the employee significantly contributed to the situation, even if their conduct wasn’t “serious misconduct”.

Why this matters:
This change shifts focus toward employee behaviour and employer fairness, potentially reducing speculative claims.

3. High-Income Threshold for Unjustified Dismissal Grievances
Employees whose total annual remuneration is $200,000 or more will no longer be able to pursue a personal grievance for unjustified dismissal. This includes salary, bonuses, commissions and other benefits. There will be a 12-month transition period for existing high-income employees to renegotiate terms if they wish to retain dismissal protections.

Why this matters:
This reflects a shift toward treating senior and highly-paid roles as more commercial employment relationships.

4. Removal of the “30-Day Rule”
The longstanding rule requiring new employees to be employed under the terms of an applicable collective agreement for their first 30 days has been removed. Employers still need to provide information about collective agreements, but new employees are no longer automatically bound by them.

Why this matters:
This change offers more flexibility in setting initial terms of employment where a collective agreement applies.

In Summary

The Employment Relations Amendment Act 2026 marks significant changes to NZ’s employment law in years. It introduces clearer definitions around contractor status, changes how personal grievance remedies are awarded, sets a remuneration threshold for dismissal claims, and removes automatic collective agreement application in the first 30 days. These reforms are expected to provide greater flexibility and certainty for employers, while reshaping how disputes and employment status questions are handled in practice.

What should you do?

• Seek advice on your situation, make a considered plan before rushing into anything.