April 2026
Following a recent session with Robyn Young and Odette Wilson from RYHR, we’re sharing a practical overview of key employment law changes now in effect, or on the way. Thanks to RYHR for providing this overview.
Whether you’re running a trade business, an agri operation, or a growing professional firm, these changes matter. Staying on top of them will help you stay compliant and avoid issues later.
Employment Relations Amendment Act 2026
Effective from 21 February 2026, this Act introduces five key changes. Not all will apply to every business, but it’s worth checking where you sit.
Removal of the 30-day rule
New employees are no longer required to be employed on collective agreement terms for their first 30 days.
What to do:
- Review and update offer documentation
- Ensure payroll and HR processes reflect the change
Contractor or employee — the Gateway Test
A new test is introduced with easily understood criteria to confirm when a worker is a contractor or an employee.
How it works:
Contractor vs Employee Tests
| Test | What it looks at | Outcome if “Yes” | Outcome if “No” |
| Gateway Test | Do all criteria for a “specified contractor” apply? | Contractor | Not a contractor → move to Common Law Test |
| Common Law Test | The real nature of the working relationship | Probably a contractor | Probably an employee |
Gateway Test
The test requires all 5 criteria to be met:
- A written agreement specifying that they are a contractor, not an employee;
- The worker is not restricted from working for others, except while actually performing work for the principal;
- The worker is not required to work certain days/times or is able to sub-contract (e.g. doctors are often contractors and must work certain days/times, so would need to be able to subcontract for the test to be met);
- Arrangement may not be terminated if the worker declines work;
- Reasonable opportunity for independent advice before signing.
Note: It cannot be applied retrospectively to current contractors
Common Law Test
- Intention
- Control v independence
- Integration
- Fundamental / economic reality
What to do:
- Review your contractor agreements.
- For current contractors, if you want the certainty of them meeting the Gateway Test, negotiate a variation to their agreement. You can only do this with their agreement. If agreement not possible, apply the Common Law Test.
- For new contractors, the Gateway Test applies provided your contractor agreement meets the requirements.
High-income threshold for personal grievances
Employees earning over $200,000 per year (total remuneration) cannot bring a personal grievance related to their dismissal.
What applies when:
For new employees – applies immediately
For existing employees – will be the default position in 12 months’ time.
Employers and employees can agree in writing to retain the dismissal protections.
Expect to negotiate!
What is total remuneration?
Total remuneration = salary + benefits
What is / is not included will be determined by case law over time. Current potential list – salary, overtime, bonuses, commission, share incentive schemes and vehicles.
A risk we see is that employees hit the $200k mark and employers (and employees) are caught by surprise.
What to do:
- Calculate and record total remuneration in writing and ensure employee is aware.
- Agree pay increases in writing.
- Review your IEA templates – update your dispute resolution process
- Consider your approach and the bigger picture before taking action.
Employee conduct in grievance outcomes
The Employment Relations Authority or Employment Court must now consider employee conduct when determining remedies.
Procedural errors
Minor procedural mistakes alone will not automatically make a dismissal unjustified, if the overall decision was fair and reasonable.
KiwiSaver contribution changes
From 1 April 2026, updates include:
- Employer and employee contributions increase to 3.5%
- Temporary reduction to 3% available via IRD (12 months)
- 16 and 17-year-olds now eligible
- Contributions increase to 4% from 1 April 2028
What to do:
- Communicate changes clearly with your team
- Review payroll and budgeting impacts
- Check Total Remuneration approaches against minimum wage requirements
- Review contributions if currently above the new minimum
The Employment Leave Bill (in progress)
Currently in Select Committee, this Bill is expected to replace the Holidays Act, with a 24-month implementation period.
Key proposed changes:
- Annual holidays calculated in hours, not days or weeks
- Annual and sick leave accrue from day one
- Sick leave accrues proportional to hours worked
- Holiday pay simplified to one calculation (base wage)
- Mandatory payslip details
- ‘Otherwise working day’ has clearer definition for varied work patterns.
- Casual workers and extra hours (overtime) paid 12.5% leave compensation payment
- Working on a public holiday accrues alternative holiday by the hour at T1.5 for hours worked. The current entitled to an alternative day is removed.
- Employees can request to cash up 25% of their annual holiday balance each year (at employer discretion.
- Employees returning from parental (and volunteer) leave are paid holiday pay at their normal rate.
- Paid bereavement and family violence leave is available from day one.
What to do now:
- If you currently have payroll issues, get them sorted.
- Stay informed as details are confirmed
- Follow guidance from your payroll provider
- Prepare for updates to employment agreements, policies, and budgets
Need support?
If you’re unsure how these changes apply to your business, it’s worth getting advice early.
Robyn and the team at RYHR work with businesses across a range of industries, providing practical HR support as needed — without ongoing contracts.
Contact RYHR:
P: 06 213 7676
E: hello@robynyoung.co.nz
Odette Wilson (Whanganui):
P: 021 143 1486
E: odette@robynyoung.co.nz
Final note
These changes don’t require immediate overhaul for every business, but they do require awareness and some considered decisions and updates. Taking a proactive approach now will make things easier down the track.
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