As a result of the Employment Relations Amendment Act 2026, New Zealand's employment law has seen significant changes in 2026, introducing reforms aimed at providing greater certainty for businesses while reshaping some employee rights.

Here's a summary of the key changes employers should be aware of.

New rules for contractors

A new statutory test has been introduced to help determine whether a worker is an employee or an independent contractor. The new test is known as the “gateway test”, which assesses five criteria:

1. Whether there is a written agreement: stating that the parties intend the worker to be an independent contractor.
2. Whether the worker is free to work for other businesses: except where reasonable, exclusivity applies while carrying out the contracted work.
3. Whether the worker can refuse additional work: beyond what they have already agreed to perform, without risking termination of the contract.
4. Whether the worker has a genuine degree of control: over how the work is performed, subject to any practical or regulatory requirements.
5. Whether the worker is required to be available: at specific times (other than where necessary to complete agreed work or comply with operational or legal requirements).

For businesses that regularly engage contractors (particularly in industries such as construction, transport, logistics and professional services) this change in the law provides greater certainty. However, businesses should still ensure that their contractor arrangements accurately reflect the reality of the working relationship.

High-income employees and unjustified dismissal claims

Employees earning more than $200,000 per year can no longer bring personal grievance claims for unjustified dismissal unless they have agreed otherwise in their employment agreement. However, employees and employers can still opt in to the previous provisions in negotiating any employment agreements.

This change is expected to have the greatest impact on senior executives and highlights the importance of carefully drafted executive employment agreements and understanding any default provisions that will be read in.

Serious misconduct may reduce employee remedies

Where an employee has engaged in serious misconduct, the Employment Relations Authority or Employment Court now has greater ability to reduce (or in some cases refuse) remedies such as compensation or reinstatement.

Importantly, employers must still follow a fair disciplinary process before taking any action.

Greater focus on substance over minor procedural errors

The law now places greater emphasis on whether an employer acted reasonably overall, rather than allowing minor procedural mistakes to automatically result in a successful personal grievance as previously there could be a substantially justified decision that was at risk when due process was not followed.

While procedural fairness remains essential, employers who act fairly and reasonably are now less likely to be penalised for technical errors.

Removal of the 30-day rule

The previous requirement to place new employees covered by a collective agreement onto collective terms for their first 30 days has been removed.

Employers can now offer individual employment agreements from the first day of employment, simplifying the recruitment process.

What should employers do?

These changes provide an opportunity for employers to review their employment practices and ensure compliance. We recommend:

• reviewing employment agreements, particularly for senior employees;
• checking contractor arrangements comply with the new legal test;
• ensuring disciplinary and dismissal processes are conducted fairly and are well documented; and
• updating onboarding processes to reflect the removal of the 30-day rule.

How Queen City Law can help

The 2026 reforms represent some of the most significant employment law changes in recent years. Whether you are reviewing employment agreements, engaging contractors, or managing workplace disputes, obtaining legal advice early can help minimise risk and ensure compliance. If you are an employee who wants to ensure your rights are protected and/or pursue your interests, we can also help.

If you have any questions about how these changes affect your business, or personal position, contact the experts at Queen City Law for practical, tailored advice.