Employment Law Updates NZ 2025: What Employers Need to Know
Keeping up with New Zealand employment law is crucial for protecting your business and supporting your people. In this post, we break down the key legislative updates—both recent and upcoming—that business owners and HR leaders should be across in 2025.
Recent Employment Law Changes
Annual Leave and Sick Leave Adjustments
While the Holidays Act Reform remains under review, businesses must ensure existing policies reflect accurate leave accrual and payment calculations under current law. Pay-as-you-go arrangements remain prohibited for permanent employees unless they meet specific casual criteria. Employers should regularly audit payroll systems for compliance, particularly around:
Correct calculation of 8% holiday pay on termination
Payment of leave at the greater of ordinary or average weekly earnings
Sick leave entitlement remaining at 10 days per year after six months' continuous service
Reminder: Employers must not request medical certificates for sick leave under 3 consecutive days unless agreed or reimbursed.
Family Violence Leave Enhancements
Under the Holidays Act 2003, employees affected by family violence are entitled to 10 days’ paid leave per year. Recent campaigns have highlighted employer obligations to:
Maintain confidentiality
Provide flexible working arrangements where possible
Not require proof of family violence unless reasonable and appropriate
Employers are encouraged to include a Family Violence Policy in their HR documentation and train managers on how to respond to disclosures.
Clarification: Employee vs Contractor Status
As part of a continued focus on fair pay and working conditions, MBIE and the Employment Court are emphasising correct worker classification.
A “contractor vs employee” gateway test is being proposed under an amendment to the Employment Relations Act 2000. This aims to prevent misclassification and exploitation, particularly in gig and courier roles.
Indicators of a genuine contractor include:
Freedom to subcontract
No exclusivity clauses
Control over hours and work method
Written agreement clearly stating independent status
Misclassifying workers may result in backpay of leave, KiwiSaver, PAYE, and potential penalties.
Upcoming Employment Law Changes
Holidays Act Reform (Expected 2025/2026)
The long-awaited Holidays Act overhaul is expected to be passed in late 2025. Key proposals include:
Leave entitlements to be based on hours worked (instead of calendar time)
Greater clarity on parental leave impacts
Improved visibility of leave balances for employees
Employers should begin preparing by ensuring payroll providers are aligned with draft reforms and that policies remain adaptable.
Health and Safety Reform Updates
WorkSafe NZ has signalled updates to the Health and Safety at Work Act 2015 to better address risks in high-hazard sectors and mental health. Expected changes include:
Clearer requirements for psychosocial risk assessments
Stronger obligations for Person Conducting a Business or Undertaking (PCBU) to consult with workers
Stricter enforcement and potential higher penalties
Now is a good time to update your risk register, ensure inductions are up to date, and designate trained Health & Safety Representatives.
Summary
Understanding and adapting to employment law changes is key to staying compliant, avoiding penalties, and fostering a fair and safe workplace. From leave management to contractor classification and health and safety, being proactive now will protect your business long term.
Need help reviewing your employment agreements or HR policies? Contact the team at Drive Culture today for tailored advice that keeps you compliant and confident.