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Employment Law: Upcoming Changes early 2026

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Emily Rust

Big Changes to Employment Law Coming in 2026: What You Need to Know

Where we're at: Parliament's review committee gave it the green light December 8, 2025.

Expected to become law early 2026

What This Means for Your Business

New Zealand's employment laws are getting a major refresh that gives employers more flexibility and clearer rules. The Employment Relations Amendment Bill 2025 has passed its committee review and the Minister expects it to become law in early 2026. Here's what you need to know.

Five Big Changes Coming

1. Clearer Rules: Who's a Contractor vs Who's an Employee

What's changing: A new checklist will help decide who counts as a genuine independent contractor. If someone ticks all the boxes, they can't later claim they were actually an employee.

Your contractors need to tick these boxes:

  • You both sign a written agreement saying they're a contractor

  • They can work for other people too (except when they're working for you)

  • Either they choose their own hours, OR they can get someone else to do the work for them

  • They can say no to extra work without losing the gig

  • They had a fair chance to get independent advice before signing

What this means for you:

  • Platform-based work arrangements (think Uber-style setups) now have much clearer legal ground

  • Just because someone works full-time hours doesn't automatically make them an employee

  • Review your contractor agreements now, before this becomes law

  • You can check subcontractors' qualifications or backgrounds if it makes sense for the work

Update from Parliament's review: The high-earner threshold was bumped up from $180,000 to $200,000.

2. High Earners Get Different Rules

What's changing: Employees earning over $200,000 total pay can't sue you for unfair dismissal (unless you both agree in writing to keep that option).

Important details:

  • "Total pay" includes everything: salary, bonuses, shares, and all monetary perks

  • Current employees over this threshold get a 12-month grace period before the new rule kicks in

  • These employees can still take action for harassment, discrimination, or other issues — just not unfair dismissal

What this means for you:

  • More flexibility when parting ways with senior people

  • Your senior employment contracts need a fresh look — especially termination clauses

  • Expect high earners to push for stronger contractual protections when negotiating

  • Watch for an uptick in discrimination and harassment claims instead

3. Employee Misconduct Now Has Real Consequences

What's changing: If an employee's bad behavior contributed to the problem, their compensation gets seriously reduced or wiped out:

If it was serious misconduct: They get nothing If they contributed but it wasn't super serious:

  • No getting their job back

  • No payment for hurt feelings

  • No payment for lost benefits

  • Might still get lost wages BUT these can be reduced to zero

What this means for you:

  • Keep really good records of employee misbehavior

  • There'll be court cases arguing over what counts as "serious misconduct" (the law doesn't define it)

  • Performance reviews and disciplinary meetings just got even more important

  • Getting the process right matters more than ever

4. "Let's Talk About Your Exit" Conversations Are Now Protected

What's changing: You can now have private conversations with employees about ending their employment, even when nothing's gone wrong — without them being able to use that conversation against you later.

What this means for you:

  • More flexibility to have honest conversations about mutual exits

  • The conversation itself is protected if you handle it properly

  • You still need to be fair and act in good faith

  • There's separate legislation adding even more protections around exit agreements

5. New Starters and Union Agreements

What's changing: New employees are no longer automatically covered by union collective agreements for their first 30 days.

What this means for you:

  • You can use individual employment terms from day one

  • Update your onboarding paperwork

  • Rethink your approach to union negotiations

  • This might affect union membership numbers and collective agreement coverage

When This Kicks In

Now: The Bill is going through Parliament's final stages Early 2026: Expected to become law Takes effect: The day after the Governor-General signs it

What You Should Do Now

Even though it's not law yet, smart businesses are getting ready:

  1. Check your contractor setups against the new checklist

  2. Look at senior employment contracts (anyone earning close to or over $200,000)

  3. Update how you handle exits to make use of the new protected conversation rules

  4. Get better at documenting employee behavior and performance issues

  5. Review your onboarding if you have union collective agreements

  6. Train your managers on why following fair process is more important than ever

Want to Dig Deeper?

Official Government Sources:

Legal Expert Analysis:

The Worker's Perspective:

Questions to Ask Yourself

  • How many of your contractors would pass the new checklist?

  • Which employees earn over $200,000 and what exit terms do they have in their contracts?

  • Are your performance records good enough to back you up under the new rules?

  • How will the 30-day rule change affect your relationship with unions?

  • Do your managers really understand how to run fair disciplinary processes?

 

Need help figuring out what this means for your business? Talk to your employment lawyer or get in touch with the Stones legal team.

This summary is based on the Employment Relations Amendment Bill as Parliament's committee reviewed it in December 2025. While it's expected to become law in early 2026, some details might still change during the final stages.