The New Contractor Gateway Test: What Employers Need to Know
If your business works with contractors, there’s a new change on the way that’s worth knowing about.
The Government has proposed a Contractor Gateway Test under the Employment Relations Amendment Bill 2025. The goal? To make it clearer who is genuinely a contractor and who might actually be an employee in disguise.
Why It Matters
Getting this wrong can cost you.
Misclassifying someone as a contractor when they should be an employee can lead to back-pay, leave entitlements, and even legal claims.
The new test aims to bring more clarity — helping both businesses and workers understand where they stand.
The Five Key Criteria
Someone will be classed as a “specified contractor” (meaning their status can’t be challenged) if all five of the following apply:
Their written contract clearly says they’re an independent contractor.
They’re free to work for other businesses — even competitors.
They can choose their own hours or subcontract work.
There are no penalties for turning down work (outside what’s been agreed).
They had the chance to get independent advice before signing.
If even one of these isn’t met, the current “real nature of the relationship” test will still apply — meaning how things work day-to-day will be looked at closely.
Our Take
This change is about clarity and fairness. It helps genuine contractor arrangements stand up to scrutiny and reminds employers to make sure what’s written on paper reflects what happens in practice.
If you engage contractors — or you’re unsure whether your current setup fits the new criteria — now’s a great time to review your agreements and processes.
We can help make sure everything’s clear, compliant, and works for both sides.
Need Support?
If you’d like to talk through what this means for your business, or check your contractor agreements, get in touch with the People Passion team — we’re here to make it simple.