Two significant changes to the proposed personal grievance threshold and contractor gateway test have been recommended by the Select Committee and endorsed by the Minister for Workplace Relations and Safety.

All remuneration sources to be included in the personal grievance high income threshold

Employees earning NZD200,000 of ‘total remuneration’ per year would now be covered under the personal grievance threshold. The update will increase the threshold from NZD180,000 and would capture more complex remuneration packages, including income from salary, bonuses, one-off payments, and employee share schemes. The threshold would cover the top 2.6 percent of wage and salary earners in New Zealand, yet businesses will still be able to contract out of this provision. 

Updates to broaden the definition of ‘specific contractors’ in the contractor gateway test

The Select Committee has also recommended further updates to the worker classification ‘gateway test’ to provide more certainty when engaging 'specific' contractors. The gateway test clarifies the meaning of ‘specific contractors’, who are not employees for the purposes of the Employment Relations Act 2000. 

The updates allow written working agreements to specify that workers are either an independent contractor or that they are ‘not an employee’, depending on the nature of how the business classifies workers. 

The test would specify that contracting an individual to work the equivalent of full-time hours will not in itself be a restriction on working for others, catering to industries that are flexible in timing where work can be performed on top of traditional full-time hours, such as platform-based work. 

Finally, there is clarification that businesses can vet subcontractors if it is justified for the nature of the work. 

Our thoughts

Organisations should anticipate changes that may be needed to employment agreements with the proposed changes expected to become law in early 2026. These anticipated changes include how best to manage the high-income threshold change (and deciding whether to 'do nothing' or negotiate/adopt a different arrangement), and how best to document and implement non-employment working relationships.

If you would like more information on how the Employment Relations Amendment Bill may affect your organisation, please contact one of our experts. 

See more: 
Major change ahead for employment law settings 
Select Committee reports back on Employment Relations Amendment Bill