The Contractor Gateway Test — Defining Who’s Really an Employee

The Government’s new Employment Relations Amendment Bill, introduced in June 2025, is designed to bring clarity to one of the trickiest questions in modern work: when is someone a contractor, and when are they really an employee?

After several headline-making cases, like Uber and Gloriavale, blurred that line, the Bill proposes a “Contractor Gateway Test”: a five-step checklist to determine whether someone can be legally recognised as a specified contractor.

If a working arrangement meets all five criteria, that person is legally a contractor. Miss even one, and the existing “real nature of the relationship” test still applies.

The five criteria

• The contract clearly states the individual is an independent contractor.
• They’re free to work for others, including competitors.
• They set their own hours or can subcontract their work.
• They can decline extra work without penalty.
• They had a genuine opportunity to get independent advice before signing.

This test is meant to create certainty, but it also raises the stakes. If your contractors operate more like employees in practice, the title on their contract won’t protect you. The law still looks at the reality of the relationship.

It’s also worth noting that Inland Revenue runs its own test for tax purposes. Someone might be a “specified contractor” under employment law but still considered an employee for tax, depending on who controls the work, how integrated they are in your business, and who carries the financial risk.

In short, written contracts matter, but behaviour matters more. Review your contractor agreements now and make sure they align with both the law and the way you actually work.

This reform is ultimately about clarity, but it also calls for integrity. Businesses should ensure their contractor arrangements genuinely reflect reality, not just what’s on paper.