This year has seen significant developments in New Zealand’s employment law. A series of legislative changes and court decisions in 2025 have reshaped workplace rights and obligations, from criminalising wage theft and promoting pay transparency, to redefining who is an employee. Next year will bring in even further changes and see some of these developments tested.
Here were the key changes introduced this year, and what else employers and employees can expect in 2026.
Crimes (Theft by Employer) Amendment Act 2025
Wage theft has now become a criminal offence. The Crimes (Theft by Employer) Amendment Act 2025 came into force on 14 March, amending the Crimes Act 1961 to target employers who intentionally fail, without reasonable excuse, to pay wages or other entitlements owed to employees. Employers who intentionally withhold wages can now be prosecuted for theft, with serious cases (over $1,000 of wages unpaid) punishable by up to seven years’ imprisonment. Previously, this kind of behaviour was treated as a workplace dispute, which tended to make enforcement slow and comparatively weak. With employers now facing criminal conviction, the law is intended to stamp out behaviours that were disproportionately harming migrant workers in particular.
Paeroa business Dev Trading Limited, trading as Super Clearance, was recently fined more than $150,000 for a range of offences including forcing migrant workers to work up to 14 hours a day, seven days a week, and deducting wages under the guise of loan repayments. The business owed more than $158,000 of unpaid wages and entitlements. However, to date, no cases have resulted in criminal charges or imprisonment.
Employment Relations (Pay Deductions for Partial Strikes) Amendment Act 2025
In mid-2025, the Government reinstated employers’ ability to deduct pay during partial strikes. The Employment Relations (Pay Deductions for Partial Strikes) Amendment Act 2025 restored provisions (repealed in 2018) that allow an employer to reduce an employee’s pay for undertaking a partial strike. Under the Act, an employer may either deduct a flat 10% of the employee’s pay, or a proportionate amount reflecting the work not done during the partial strike. Notice requirements apply, and employers must use this tool carefully to ensure any pay deduction is lawful.
Employment Relations (Employee Remuneration Disclosure) Amendment Act 2025
The Employment Relations (Employee Remuneration Disclosure) Amendment Act 2025 came into force on 27 August, amending the Employment Relations Act 2000 to ensure employees can discuss their pay if they wish. The reform is intended to bring New Zealand in line with other countries including Canada, the UK and Australia and help address the lack of pay transparency, which can perpetuate ethnic, gender, and disability pay gaps. Any employment agreement clause that prohibits an employee from disclosing their remuneration is now invalid, and it is unlawful for employers to treat employees adversely for disclosing their remuneration to others.
Employment Leave Act 2026 (proposed)
The Government has confirmed its intention to repeal the Holidays Act 2003 and replace it with a new Employment Leave Act. The reform is aimed at simplifying entitlements, improving consistency for employees with variable hours and reducing the long-standing compliance issues created by the current Act.
Under the proposed framework, annual and sick leave would accrue from an employee’s first day and could be taken in hours rather than days. An hourly leave pay rate will be used for all leave types, rather than the current variety of calculations for different situations. Casual employees would no longer receive 8% 'pay as you go' holiday pay, and instead would be be paid a 12.5% leave compensation on all earnings.
The reforms also aim to make rules clearer for public holidays, bereavement leave, and family violence leave, with some entitlements available from day one. A full breakdown of these and other proposed changes is available in our previous update.
The Bill is expected to be introduced in early 2026, and will go through a public submissions process. A 24-month transition period is expected once the legislation is enacted, to enable payroll providers and employers to update their systems.
Health and safety reforms proposed
The Government announced plans to overhaul aspects of the Health and Safety at Work Act 2015. The proposed changes aim to simplify compliance and focus attention on critical risks. Key measures include carving out small, low-risk businesses from most duties under the Act, so they only need to manage critical risks (causing death and serious illness) and provide basic facilities to ensure worker welfare. Other changes confirm that landowners will not be liable if recreational users are injured on their property; and clarify that directors are responsible for governance, not operational safety.
Individual sectors are also to receive targeted reforms. Consultation with the construction industry has been undertaken on measures such as a introducing a risk-based hierarchy for working at height. This change is to help construction businesses select appropriate safety measures relevant to each task and reduce unnecessary use of scaffolding. WorkSafe has also been directed to clarify how health and safety responsibilities are managed between contractors on shared worksites through an Approved Code of Practice (ACoP).
The agriculture sector is working with WorkSafe to develop its own ACoP to clarify overlapping responsibilities between multiple parties on farms, as well as on the safe use of farm vehicles. Other risk-based reforms have been proposed for the adventure tourism and events, manufacturing and science and technology sectors.
Draft legislation is expected in 2026, following consultation with the relevant industries.
Employment Relations Amendment Bill 2025
Introduced in June, the Employment Relations Amendment Bill 2025 proposes sweeping changes to the Employment Relations Act 2000. Key provisions include:
- High earning employees (with remuneration over $200,000 per annum) would be unable to bring unjustified dismissal claims (unless opted out by contract)
- In personal grievance cases, no remedies would be available if an employee is dismissed for serious misconduct. Lesser misconduct could reduce remedies by up to 100% (up from 50%), with no compensation for hurt and humiliation or options for reinstatement if employees are found to have contributed to their personal grievance
- Scrapping the “30-day rule” which currently requires new employees in a unionised workplace to be on the terms of the applicable collective agreement for their first 30 days. The Bill would allow employers and new employees to negotiate an individual employment agreement from the start.
The Bill was reported back from Select Committee on 8 December 2025. It is expected to pass in 2026.
Supreme Court confirms Uber drivers are employees
On November 17, 2025, the Supreme Court declined Uber’s appeal that four Uber drivers were employees. In Rasier Operations BV v E Tū Inc [2025] NZSC 162, the Supreme Court ruled that the drivers were employees, not independent contractors, and therefore were entitled to benefits such as leave entitlements, holiday pay and a minimum wage. It found Uber denied drivers genuine autonomy, given they were unable to effectively select riders and vice versa.
The wider impacts of this decision will likely be countered by the Employment Relations Amendment Bill, which contains provisions for a “gateway test” that limits workers' ability to challenge their status. As it was introduced, the Bill proposes the following criteria:
- There is a written agreement between the business and the worker specifying that the worker is an independent contractor
- The business does not restrict the worker from working for another business (including competitors)
- The business does not require the worker to be available to work on specific times of day or days, or for a minimum number of hours or the worker can sub-contract the work
- The business cannot terminate the contract if the worker does not accept an additional task or engagement.
Our recent update highlights several recommendations made by the Select Committee in its report back to the House on the Bill, and it will be interesting to see the final form the Bill takes as it progresses through Parliament in 2026.
Public Service Amendment Bill 2025
The Public Service Amendment Bill, introduced in July, seeks to remove statutory diversity and inclusion objectives from the Public Service Act 2020. Appointments would be based solely on merit, and references to equity initiatives would be dropped. The Select Committee reported back on the proposals at the end of November, having received 94 submissions from the public. No changes have been recommended to the Bill’s diversity and inclusion requirements, so these are likely to remain as the legislation progresses.
As we noted in a previous update, removing the statutory requirement to consider diversity and leaving it to departmental discretion could erode a fundamental public service principle: that its workforce should reflect the communities it serves. This shift has the potential to stall progress and weaken transparency and reporting on diversity, equity and inclusion across government, undermining public confidence.
Departments are likely to face more scrutiny on how they will strike the balance between efficiency and merit without inadvertently undermining the public service objective of serving all New Zealanders effectively.
A look ahead to 2026
Following significant announcements and consultation in 2025, we expect 2026 to be another busy year in the employment relations space ahead of the general election. We are looking forward to seeing drafts of the new holidays and health and safety legislation, and the implementation of the Bills that are currently before the House. Employers will want to be across the changes that are coming, and as they happen, to ensure they are prepared and don’t fall foul of any new laws.
It will be interesting to see whether any of the changes this Government has made become election issues and, if there are changes to the governing parties following the election, what impact that will have on changes that have been implemented or are in the pipeline.
For more advice on navigating these changes, and how to prepare, contact one of Buddle Findlay’s employment law experts.
