The contractor gateway test explained: What the 2026 legislative changes mean for your business
New Zealand now has a specific test for determining whether a worker is an independent contractor or an employee. This is one of the most practically significant changes in the Employment Relations Amendment Act 2026 for businesses that engage contractors.
Why Was This Needed?
Before this change, deciding whether someone was an employee or a contractor involved looking at the overall nature of the working relationship, which was flexible but could be unpredictable. High-profile disputes, including cases involving gig economy workers, highlighted how uncertain this could be for both businesses and workers. The gateway test aims to provide more clarity upfront.
How Does the Gateway Test Work?
A new statutory gateway test now applies to contractor arrangements. If all required criteria are met the worker will be deemed a “specified contractor” and excluded from claiming employee protections.
For a worker to be classified as a specified contractor under the new test, all of the following must apply:
there is a written agreement stating the person is an independent contractor;
the worker is not restricted from working for other businesses except during the time that they are performing work for the business;
the worker can control when work is done, or can subcontract the work (with some proviso around reasonable approvals);
the worker can decline additional work without the contract automatically coming to an end; and
the worker had a genuine opportunity to get independent advice before entering the agreement.
What If the Gateway Test Is Not Met?
If an arrangement does not meet all the criteria, the older common law test still applies. The Employment Relations Authority or Employment Court will look at the real nature of the relationship to determine the worker's status. The gateway test only applies to new arrangements entered into from 21 February 2026 onwards and does not apply retrospectively.
A Word of Caution
Meeting the gateway test requires every criterion to be satisfied. Simply calling someone a contractor or using an existing template is not enough. Each new contractor engagement should be reviewed carefully. If a worker does not satisfy the test, they may still be able to claim employee status and access employee rights and entitlements if it is determined that they would more accurately be described as being an employee.
Practical Implications for Employers
Review every new contractor arrangement against the gateway test criteria before the engagement begins.
Do not assume existing templates automatically satisfy the new test.
For arrangements entered into before 21 February 2026, the old common law test still applies to any historical disputes.
Seek advice if you are unsure whether a particular arrangement qualifies under the new test.
Practical Implications for Employees
If your arrangement meets all of the gateway test criteria, you will be classified as a contractor and cannot challenge that classification through the Employment Relations Authority.
If the criteria are not all met, you may still be able to argue you are an employee and access employee rights and protections.
Before signing any new contractor agreement, make sure you have had a genuine opportunity to seek independent advice. This is one of the criteria and is there to protect you.
If you believe you are being incorrectly classified as a contractor, get legal advice early.
Please note: This article is intended as general information only and is not a substitute for legal advice. If you have questions about how these changes affect you or your business, contact the team at McLuskie Dalziel Lawyers.
