The start of 2026 has brought some of the most significant changes to New Zealand employment law in recent years. From the way we handle high-earning staff and contractors, to personal grievance remedies, minimum wage increases, and proposed leave reforms, these updates have practical implications for every employer.

We’ve put together this summary to help you understand the changes, why they matter, and what steps you may need to take now to stay compliant and manage your workforce effectively.

Employment Relations Amendment Act 2026 – Four Key Changes

The Employment Relations Amendment Act 2026 became law on 21 February 2026 and introduces the most significant changes to New Zealand employment law since 2018. It reshapes the start and end of employment relationships, defines contractor status more clearly, and changes personal grievance remedies. Below is a detailed overview of what has changed, why it matters, and practical steps to take.

1 - High Earner Exception - managing senior and highly paid staff

‍The law now treats employees on very high incomes differently when it comes to unfair dismissal claims. This change gives employers more flexibility to manage the employment of senior or highly paid staff, while still allowing the employee to keep protections if both parties agree.

Key points:

  • Employees earning more than $200,000 a year generally cannot raise a personal grievance for unfair dismissal (or disadvantage related to dismissal).
  • This only applies if the employer and employee do not agree in writing to keep these protections.
  • If no agreement is made, the protections do not apply.
  • Annual remuneration includes salary, bonuses, commissions, and share scheme benefits, usually calculated over the 12 months before dismissal.
  • For existing High Earners, the change takes effect by 21 February 2027.
  • New High Earners are covered immediately.
  • Employers do not have to provide reasons or follow standard good faith steps when ending a High Earner’s employment, but clear contracts and documentation are still essential.

What to do:

  • Review existing High Earner agreements – decide whether to let employees keep the usual unfair dismissal protections.
  • Check employment agreements and HR policies to make sure they don’t accidentally override the High Earner exception, for example by requiring a specific dismissal process or extra obligations.

2 - Contractor vs Employee – “Gateway Test”

o reduce uncertainty about whether a worker is an employee or a contractor, the law now sets out a clear gateway test. This helps businesses confirm when someone can legitimately be treated as a contractor rather than an employee.

A worker is considered a contractor if all the following apply:

  • A written agreement confirms independent contractor status
  • They have freedom to work for others
  • They are not required to be available at set times
  • They have the ability to subcontract
  • The arrangement does not end if they decline additional work
  • They have had a reasonable opportunity to seek independent advice before signing

If a worker does not meet all these criteria, the usual common law test continues to apply, which considers control, integration with the business, and the real nature of the relationship.

What to do:

  • Ensure contractor agreements are clear and meet the gateway test criteria.
  • Review working arrangements to confirm contractor status is genuine and reduces classification disputes.

3 - Personal Grievance Remedies - handling misconduct and dismissal

‍The law has clarified how personal grievances are treated, especially when an employee’s own behaviour contributed to the situation.

Key points:

  • Remedies such as reinstatement or compensation for humiliation, loss of dignity, or injury to feelings may be reduced or unavailable if the employee contributed.
  • Serious misconduct by the employee can remove entitlement to all remedies.
  • Procedural mistakes alone no longer automatically make a dismissal unjustified – only if the employee is actually treated unfairly.

What to do:

  • Review employment agreements, disciplinary policies, and misconduct definitions.
  • Update processes to ensure clarity on handling grievances, misconduct, and terminations.

4 - Collective Employment Agreements: 30-Day Rule Removed ‍

The law has changed how new employees start under a collective agreement. Previously, employees automatically received the collective agreement’s terms for the first 30 days. This is no longer the case, giving employers and employees more flexibility to agree individual terms from day one.

Key points:

  • Employees covered by a collective agreement are no longer automatically entitled to the agreement’s terms for the first 30 days.
  • Employers must still provide information on the collective agreement, union options, and a copy of the agreement.

What to do:

  • Update onboarding and HR policies to reflect the ability to set individual employment terms from day one.

Minimum Wage – Effective 1 April 2026

Minimum wages are increasing, affecting both hourly and salaried employees.

Rates:

  • Adult minimum wage: $23.95 per hour
  • Training & starting-out wage: $19.16 per hour
  • Equivalent 40-hour week salary: $49,976 per year

What to do:

  • Review and adjust pay rates before 1 April.
  • Ensure salaried employees’ pay meets minimum wage thresholds.
  • Update payroll systems accordingly.

Privacy Act Amendment

A new amendment to the Privacy Act takes effect on 1 May 2026, introducing IPP 3A. This new rule means that when organisations collect someone’s personal information or directly from someone other than the person themselves, they must take reasonable steps inform the person concerned.

There are limited exceptions, such as when the information is already public, notification would be impractical, or alerting the individual would undermine their interests or create a serious risk to safety.

Penalties may apply if organisations fail to meet the new obligations.

KiwiSaver Contribution Changes – Effective 1 April 2026

KiwiSaver rates are increasing over the next few years.

Key points:

  • Default contributions: 3.5% from 1 April 2026, rising to 4% from 1 April 2028
  • Employees can temporarily reduce contributions to 3% for 3–12 months via Inland Revenue
  • Employers must contribute for 16–17 year olds if they are contributing
  • Auto-enrolment continues at age 18

What to do:

  • Advise staff about the changes and temporary reduction option
  • Update payroll from the first payrun on or after 1 April
    Apply approved temporary reductions for employees who request them
  • Update onboarding and payroll forms (KS2, KS3, KS10)

Support we can provide: We can draft clear communications to staff and provide updated KiwiSaver forms, ensuring employees understand their options and how it affects their pay.

Privacy Act Changes – Effective 1 May 2026

From 1 May 2026, the Privacy Amendment Act 2025 introduces new requirements for indirectly collected personal information (e.g., references, background checks, or third-party info).

‍What’s changing:

  • You must notify someone if you collect their personal information from another source.
  • Notifications need to explain:
    • What info you collected
    • Why you collected it
    • Who will receive it
    • Who holds it
    • Whether collection is legally required
    • Their right to access and correct the info

‍Exceptions:

  • If the person was already notified
  • Information is anonymous or not identifiable
  • Not notifying won’t cause them harm
  • Legal or practical reasons make it impossible

What to do:

  • Review how you collect information indirectly (e.g., references, third-party checks).
  • Update privacy statements and internal policies.
  • Make templates for notifying people when information is collected indirectly.
  • Check contracts with third parties that provide you personal information.

These changes only apply to information collected after 1 May 2026.

Looking Ahead – Leave & Health & Safety Reform

Holidays Act Reform – Employment Leave Bill

The Government has introduced the Employment Leave Bill, which proposes to repeal and replace the Holidays Act 2003. The aim is to create a simpler, more consistent, and easier-to-administer system for calculating leave entitlements.

While the Bill is still progressing through Parliament, it signals significant change for all employers.

Key proposed changes:

  • Leave accrues from day one: In addition to Annual Leave, employees will begin accruing Sick Leave immediately from the start of employment.

  • Leave calculated in hours (not weeks/days): All leave entitlements (including annual and sick leave) will be calculated and taken in hours, improving accuracy for variable work patterns.

  • Annual leave accrues at a set hourly rate: A standard accrual formula will apply based on hours worked, simplifying calculations across payroll systems.

  • Sick leave becomes pro-rated and accrues over time: Sick leave will accrue based on hours worked, up to a capped balance of 160 hours (rather than a fixed annual entitlement).

  • Bereavement and family violence leave available from day one: These entitlements will apply immediately (rather than after six months), and can be taken in part-days.

  • New “otherwise working day” (OWD) test: A clearer test will apply for determining public holiday entitlements for employees with irregular work patterns.

  • Casual and additional hours: 12.5% leave compensation payment: Casual employees will receive a 12.5% leave compensation payment to cover both annual and sick leave equivalents (replacing the current 8% holiday pay model).

  • Ability to cash up more annual leave: Employees will be able to cash up to 25% of their annual leave balance per year (increased from the current one week limit).

  • Annual leave after parental leave will be paid at full pay.

  • Commission will be removed from leave calculations.

  • Itemised payslips will become mandatory.

A transition period of up to 24 months is proposed once legislation is passed.

What to do:

  • Prepare to update payroll, agreements, and policies once the Bill becomes law

Health and Safety at Work Reform

A new Health and Safety Amendment Bill was introduced on 9 February 2026. If passed, it will be the biggest change to health and safety law since 2015. The goal is to focus on preventing serious harm while reducing unnecessary compliance work for businesses.

Key points:

  • Focus will shift to critical risks (risks likely to cause serious injury, death, or notifiable incidents).
  • Small businesses (<20 staff) will only need to manage critical risks; larger businesses must manage all risks but prioritise critical ones.
  • Officers (directors, managers) must ensure the business complies with health and safety law.
  • Recreational land use will be clarified - businesses wouldn’t generally be liable for visitors enjoying the property unless they’re doing work-related activities or work is happening in the same area at the same time.

‍What to do:

  • Begin reviewing critical risks and responsibilities
  • Assess whether work overlaps with recreational land use
  • Be ready to adjust policies if reforms proceed

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Need advice or people-support? Our team are ready and available. Give us a call on +64 9 300 7224 or email hello@thepeopleplace.co.nz.

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Photo by Markus Winkler on Unsplash