Most business owners have heard about the new Gateway Test for specified contractors.
But that is only one part of the Employment Relations Amendment Act 2026.
There are several other major changes that could affect how you hire, manage, and exit employees in New Zealand. Some give businesses more flexibility. Others reduce risk. And some will change how employment agreements are structured from day one.
Here is a clear breakdown of the most important additional changes Kiwi business owners should understand.
The Five Key Changes at a Glance
Employees earning more than $200,000 per year will now face restrictions on bringing unjustified dismissal claims. This applies to high-income roles such as senior executives, directors, high-level consultants, and specialist technical leadership roles.
Why this matters
Previously, businesses faced significant legal risk when hiring senior staff. If the relationship didn't work out, dismissal could result in costly legal claims, settlement costs, and business disruption. This change gives employers more confidence to hire senior talent and reduces the risk of personal grievance claims at the highest salary levels.
Previously, employees had to be employed under a collective agreement for the first 30 days if one existed. This rule has now been removed. Employers and employees can now negotiate individual employment agreements immediately — from day one.
Why this matters
This gives businesses more flexibility when hiring. It allows faster hiring decisions, direct negotiation with employees, and greater control over employment terms. It simplifies the onboarding process, especially for small businesses.
The Act strengthens accountability around serious misconduct. It reduces the ability for employees to receive financial compensation if they contributed to their own dismissal through serious misconduct.
Why this matters
Previously, businesses could still be required to pay compensation even when serious misconduct occurred. The new law strengthens fairness and helps ensure that misconduct is treated appropriately — reducing financial exposure for businesses acting reasonably.
The Gateway Test itself is part of a broader effort to clarify contractor relationships — providing certainty and reducing ambiguity across industries including construction, trades, IT, marketing, consulting, and transport.
Why this matters
These sectors rely heavily on contractors. Clarity helps protect both sides and gives businesses confidence that compliant contractor arrangements will be recognised as genuine.
Employees already earning over $200,000 will have up to 12 months to renegotiate employment agreements before the new dismissal threshold fully applies.
Why this matters
This gives businesses time to adjust existing agreements with senior staff and implement changes properly without rushing.
When These Changes Came Into Effect
Most provisions of the Employment Relations Amendment Act 2026 came into force on 20 February 2026. For the full parliamentary timeline from introduction to Royal Assent, see our complete Gateway Test NZ key dates and timeline.
Why the Government Introduced These Changes
The goal is to rebalance employment law and increase business confidence in New Zealand. The reforms aim to reduce legal uncertainty, support business growth, encourage hiring, and provide clearer rules for both contractors and employees.
When businesses feel confident hiring, the economy grows and more jobs are created. This is the core objective behind the reforms — a more certain, flexible environment for New Zealand employers and workers alike.
What Kiwi Business Owners Should Do Now
There are three practical steps every business owner should take immediately.
1. Review your contractor agreements
Ensure they meet all five criteria of the Specified Contractor Gateway Test. This protects you from contractor misclassification risk. Use our instant compliance checker to get a report in under 60 seconds.
2. Review employment agreements for senior staff
If you employ staff earning over $200,000, review their agreements now. Ensure clarity and alignment with the new threshold rules. Remember the 12-month transition period applies to existing employees.
3. Update your hiring process
The removal of the 30-day rule gives you more flexibility. You can now structure individual employment agreements immediately from day one. Use this to your advantage when onboarding new team members.
Don't wait. Most of these changes are already in force. Businesses that haven't reviewed their contractor and employment agreements are already operating under the new rules — whether they know it or not. The time to act is now.
Why This Matters Especially for Small and Medium Businesses
These changes provide real, practical benefits for SMEs. They reduce risk, increase certainty, simplify hiring, and make contractor relationships safer. This is particularly important for growing businesses that rely on flexible staffing arrangements.
The Employment Relations Amendment Act 2026 and the wider Gateway Test reforms provide a clearer legal foundation — one that rewards businesses doing things correctly.
Check Your Contractor Agreements Now
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Check My Contract Now → $45 per report · Use code 40SPECIAL for 40% off · GST receipt includedFinal Note: What We Know As of Today
This article reflects the position as of 22 February 2026. Most changes in the Employment Relations Amendment Act 2026 came into force on 20 February 2026. Some elements include transition periods, particularly for high-income employee thresholds.
As with any legal reform, interpretation and practical application will continue to evolve. Business owners should stay informed and review agreements regularly. For more detail on the Gateway Test specifically, read our guides: the five Gateway Test criteria explained and the full 2025–2026 key dates timeline.