The Independent Contractor Gateway test: when does it apply?

Published 27 March 2026 | 3 min read

Recent changes to the law that arrived via the Employment Relations Amendment Act 2026 (Amendment Act).

A key change is the new ‘gateway test’, designed to cut through confusion about whether a worker is an employee or a contractor. But an important question has arisen: when does the new test apply?

Brief summary of the test

A worker will now be considered a ‘specified contractor’ under the Employment Relations Act 2000 (Act) if:

1. There is a written agreement that states the worker is an independent contractor; AND
2. The worker has freedom to work for others (note that a worker working full time hours for a principal will not necessarily amount to a restriction on working for others); AND
3. The worker is not required to be available at set times, OR they have the ability to subcontract; AND
4. The arrangement does not end solely because the worker declines additional work; AND
5. The worker had reasonable opportunity to get independent advice before signing.

A worker has to meet all of the above criteria (noting that the third criteria above contains an ‘either or’ criteria) to be considered a specified contractor.

When does it apply?

The wording of the Act is clear. The gateway test applies from the commencement date of the new legislation onwards, i.e. from 21 February 2026 onwards, regardless of when the parties entered into the arrangement.

The only exception to this is if a worker commenced proceedings pre-21 February 2026 arguing that they were an employee under section 6 of the Act as opposed to a contractor. In that case – and that case only – the gateway test does not apply to the worker.

What does this mean?

Unless the worker commenced proceedings arguing they are an employee prior to 21 February 2026, the gateway test applies from that date.

If a working arrangement meets the gateway test’s criteria, the worker is a specified contractor and classified as such by law from 21 February 2026. This is the case regardless of when the arrangement began or the agreement documenting it was signed.

The worker can still bring a claim before the Employment Relations Authority or Employment Court in respect of the period prior to 21 February 2026, subject to the statutory time limit of six years to bring the claim. The Authority or Court will apply the common law test to determine the workers’ status for the period up to 21 February 2026.

If a working arrangement does not meet the gateway test’s criteria, the Employment Relations Authority or Employment Court must apply the common law test to determine the worker’s status as an employee or contractor. The Authority or Court will apply the common law test for the period prior to and after 21 February 2026.

The common law test for determining whether a worker is an employee or contractor involves assessing the ‘real nature’ of the relationship, considering factors such as control, integration, the economic reality of the arrangement, and the parties’ intentions.

We recommend businesses review their agreements with contractors without delay. Businesses should consider how these arrangements operate in practice and whether the gateway test will apply with a view to taking steps to mitigate any risk that these arrangements would fail the gateway test, and the worker would be considered an employee under the common law test.

Information courtesy of Lane Neave.