22 January 2026
Employer Update
Close
New Zealand’s employment law landscape continues to evolve. A range of significant reforms and key legislative changes have already taken effect recently, are being proposed or progressing through Parliament. While not all changes are yet enacted, many signal a clear policy direction and warrant early consideration by employers.
This article provides a high-level overview of key potential employment law changes and other important updates that employers should have on their radar, including their likely impact, and practical considerations for employers to manage workforce risk, compliance and cost.
Employer Wage Theft
In 2025, the Crimes (Theft by Employer) Amendment Act 2025 came into force, marking a significant change in how serious wage non-compliance is treated. Employers can face criminal prosecution and liability, including imprisonment and fines of up to $30,000 for intentional and dishonest failure to a pay wages or entitlements to employees, including making unlawful deductions.
Pay Secrecy and Pay Disclosure Restrictions
In 2025, the Employment Relations (Employee Remuneration Disclosure) Amendment Act 2025 came into force. It is unlawful for employers to take adverse action, such as dismissal, demotion, or disadvantage against employees who discuss or disclose their pay.
Employers can no longer prevent employees from discussing their remuneration, including enforcing contractual terms relating to the same on employees. Employees can share their remuneration with anybody, including their colleagues and their employer cannot take any adverse action against them for doing so.
Holidays Act Reform
The Government has been working on proposals to replace or substantially reform the Holidays Act 2003. However, the current legislation remains in place and employers must continue to comply. Importantly, in the event of legislative reform or change – historical non-compliance will not be extinguished.
Without Prejudice or ‘Off-the-Record’ Conversations
The Employment Relations (Termination of Employment by Agreement) Amendment Bill proposes to make it easier for employers to have off-the-record termination discussions with employees.
If enacted, employers would be able to initiate protected negotiations about ending employment by mutual agreement, even where no dispute exists. These discussions would be automatically inadmissible in personal grievance proceedings.
Personal Grievance Exclusions for High-Income Earners
The Employment Relations Amendment Bill proposes the introduction of a high-income threshold (earning over $200k) precluding high-earning employees from personal grievances for unjustified dismissal or unjustified disadvantage relating to dismissal.
Proposed Contractor Gateway Test
The Employment Relations Amendment Bill proposes changes to clarify ‘contractor status’ and reduce litigation over worker misclassification. The Bill introduces a ‘specified contractor’ gateway test, which would prevent individuals who meet defined contractor criteria from challenging their worker status as employees under section 6 of the Employment Relations Act 2000.
Changes to the 30-day Rule and Provision of New Employee Information
The Employment Relations Amendment Bill proposes removal of the ‘30-day Rule’ which requires new employees to be employed on the same terms of a collective employment agreement for their first 30 days of employment. The Bill also proposes remove the obligation on employers to share new employee information with a union.
KiwiSaver Changes
The 2025 Budget introduced changes to KiwiSaver, including staged increases to default contribution rates from 3% to 3.5% in April 2026, and 4% from April 2028. Employees may temporarily opt to remain at 3%, with employers matching that rate.
Eligibility will extend to 16–17-year-olds, allowing access to employer and government contributions. From 1 July 2025, the Government contribution halves to 25 cents per dollar, with the annual cap reducing to $260.72, and eligibility limited to earners of $180,000 or less.
Minimum Wage Increases
From 1 April 2026, the adult rate will increase to $23.95 per hour, with the starting-out and training rate remaining at 80% of the adult wage ($19.16 per hour). These rates are gross, before tax and deductions, and employers must ensure payroll systems are updated when the new rates take effect.
Other Areas and Trends to Watch
Employer Insights
Changes, developments and trends in the employment law landscape for 2025–2026 continue to highlight the importance of employer compliance and may provide increased certainty to employers navigating contentious areas of employment relations such as when wanting to exit employees.
While not all proposed reforms are law yet, many signal a clear policy direction and some require early consideration, particularly in areas such as wage deductions, contractor engagement, termination processes, and workforce cost management.
Employers who take a proactive approach – reviewing employment agreements, payroll systems, policies, and governance frameworks will be best positioned to manage risk, control costs, and respond effectively as changes are implemented.
Importantly, in terms of the pending Holidays Act reform does not displace existing legal obligations, and historical non-compliance in this area will remain actionable even if the current legislation is replaced.
Employer Pro will update our members with important employer-focused information regarding developments to New Zealand’s industrial relations framework, including continuing to develop concise employer-focused resources, webinars and templates to assist our members with managing compliance as legal changes take effect.
This article is provided for general information only and does not replace professional advice. Employers should seek advice specific to their circumstances from Employer Pro if in doubt on their legal obligations associated with any issues, or compliance concerns regarding managing workplace compliance, or personal grievance claim management. Employer Pro has a range of employer focused resources and services available through our competitive Employer Protection Packages.
Employer Pro Limited – Empowering Employers Through Effective People Solutions
Empowering employers through effective people solutions. Professional employment relations, consultancy support, and representation for employers at affordable prices. Backed by over a decade of real-world business and people experience.
© Copyright by Employer Pro
