A major change to New Zealand employment law has quietly come into force, and it could expose thousands of Kiwi businesses to unexpected legal and financial risk.
The new Gateway Test, introduced under the Employment Relations Amendment Act 2026 and effective from 20 February 2026, changes how independent contractors are legally classified.
If contractor agreements fail to meet strict new criteria, those contractors may legally qualify as employees, regardless of what their contract says.
This could expose businesses to claims for holiday pay, KiwiSaver contributions, wage arrears, and personal grievance compensation.
Many business owners are unaware the change has already happened. Most contractor agreements currently in use were written before the law came into force.
Independent contractors are widely used across New Zealand in industries such as construction, IT, marketing, professional services, and trades. For years, businesses have relied on standard contractor templates or agreements written under previous legal frameworks.
But the Gateway Test introduces specific legal criteria that many of these agreements may not meet. If even one requirement is missing, the contractor may fall outside the protection of the Gateway Test.
This means the relationship can be reassessed by the Employment Relations Authority or Courts based on the reality of how the contractor works, not just the wording of the agreement.
Misclassification claims can result in significant financial consequences. Businesses may be liable for backdated holiday pay, KiwiSaver contributions, minimum wage adjustments, and compensation.
In response to the law change, Auckland based company GatewayTest.co.nz has launched an online tool designed to help businesses quickly assess whether their contractor agreements meet the new legal criteria.
The platform allows employers to upload their contractor agreement and receive a structured compliance report showing whether the agreement aligns with the Gateway Test requirements.
Stephen Martin, founder of GatewayTest.co.nz, says the goal is to help business owners understand their risk before problems arise.
“Most business owners assume their contractor agreements are safe because they were written by a lawyer or downloaded from a template. But this law introduces specific legal requirements that many agreements were never designed for.”
Businesses can check their contractor agreements using the Gateway Test tool at
https://gatewaytest.co.nz
The Employment Relations Amendment Act passed its final reading in Parliament on 17 February 2026 and came into effect on 20 February 2026.
Experts recommend reviewing contractor agreements as soon as possible to ensure they align with the Gateway Test criteria.
Media Release on 24 February 2026
Media Contact
Stephen Martin, Virtual Innovation Group Limited
Email: stephen@gatewaytest.co.nz
Phone: 0220430074
Media: https://gatewaytest.co.nz/press/thousands-of-nz-businesses-exposed-contractor-law