Gateway Test New Zealand: Contractor vs Employee Law Changes Explained

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Understanding the New Gateway Test for Contractors in New Zealand

New Zealand employment law is evolving with legislative changes being introduced to what is commonly referred to as the “Gateway Test” for determining whether a worker is an independent contractor or an employee.

For many years, the Employment Relations Authority and the Courts have relied on the “real nature of the relationship” test. This meant that even where a business had a written contractor agreement in place, a worker could later challenge their status and argue they were, in reality, an employee.

The 2026 Gateway Test aims to provide greater certainty for genuine contractor relationships by introducing a framework that the Authority may consider when assessing status disputes. However, it is important to recognise that:

• The legislation is new and developing.
• The Courts and the Employment Relations Authority will ultimately interpret how the Gateway Test operates in practice.
• We will not know exactly how the law will be applied until early test cases are decided in our courts.

Because of this uncertainty, businesses should focus on reducing risk rather than assuming any particular structure guarantees contractor status.

Contractor vs Employee NZ: What the Employment Relations Authority May Look At

Under the proposed Gateway Test, the Authority is expected to examine several key features of the relationship. These factors are not a checklist that automatically determines status, but they may influence how the Authority assesses whether the arrangement reflects genuine contracting.

Written Independent Contractor Agreement

A clearly drafted written agreement remains a critical starting point. The Authority is likely to consider whether the agreement reflects a genuine commercial arrangement rather than an employment relationship in disguise.

Freedom to Work for Others

A contractor arrangement typically allows the worker to provide services to multiple clients or businesses. Restrictions that resemble exclusivity or employment-style loyalty requirements may increase the risk of a worker being declared an employee.

Control Over Hours and Availability

Where a worker must follow fixed rosters, work minimum hours, or be available at set times, the relationship may begin to resemble employment. Structures that allow the contractor to choose when they accept work may help demonstrate independence.

Ability to Subcontract or Provide a Substitute

The ability for a contractor to delegate work or use a suitably qualified substitute may indicate that the worker is operating their own business rather than acting as an employee.

Freedom to Decline Additional Work

A genuine contractor relationship usually allows the worker to decline additional engagements without disciplinary consequences or termination solely for that reason.

Why the Gateway Test Does Not Remove Legal Risk

Although the new legislative framework aims to create clarity, it does not eliminate disputes about contractor status.

The Employment Relations Authority will still look beyond the written agreement and examine how the relationship works in practice. Factors such as integration into the business, levels of control, payment structures, and day-to-day behaviour may still influence the outcome.

However, complying with the provisions of the "Gateway Test" will reduce the risk of the worker being defined as an employee in two distinct ways.

The Courts must follow the "Gateway Test" legislation

Provided the Courts determine you are compliant with this new legislation then they have no option but to determine that the worker is a contractor. Previously the courts had a wide discretion on how they interpreted this.

Appearing to comply with the "Gateway Test" will reduce the chance of a worker commencing litigation against you in the first place

The most cost effective legal defense is not having to defend yourself. Having a signed contractors agreement that appears to comply with the "Gateway Test" will slow down any person contemplating taking litigation against you to begin with as their chances of success will appear significantly reduced. it should also stop opportunist "No Win No Fee" representatives taking on such matters as they to don't like to work for nothing.

Until early Authority decisions are released, there will be uncertainty around how strictly each element of the Gateway Test will be interpreted. Businesses should therefore approach contractor arrangements carefully and ensure their agreements align with both the legislation and real-world operations.

This information is intended as general guidance only and should not be relied upon as legal advice for any specific situation.

Independent Contractor Agreement NZ – Custom Templates Designed for the Gateway Test

If your business engages contractors, having a properly structured agreement drafted with the new legislative framework in mind may help reduce future risk.

We provide custom Independent Contractor Agreements template tailored to your industry, operational structure, and business model. These templates are drafted after consultation with you about your industry and needs and are then written with the "Gateway Test" in mind. As stated prior, these agreements will reduce the risk of an employment challenge, but there is no agreement that can guarantee it will eliminate such a challenge.

What Is Included in Your Custom Contractor Agreement

• Drafting aligned with the proposed Gateway Test framework
• Clauses designed to reduce the risk of employee status challenges
• Industry-specific wording that reflects real working arrangements
• Clear, practical language suitable for day-to-day business use

Pricing – Unlimited Licence Contractor Agreement

Custom Contractor Agreement Template:
$1,995 + GST

Your business receives a customised agreement with an unlimited licence to use within your organisation or related entities.

Talk to Us About Contractor Agreements in New Zealand

If you are reviewing your contractor arrangements with the new "Gateway Test" legislation in mind or considering transitioning to a contractor model, we can assist with agreements drafted to reflect the changing legal landscape.

Contact us to discuss whether a customised Independent Contractor Agreement is suitable for your business.

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Phone: 0800 HELP-ME or 021 77 1919