{"id":1125,"date":"2020-12-11T01:19:10","date_gmt":"2020-12-11T01:19:10","guid":{"rendered":"http:\/\/nz.legalvision.com.au\/?p=1125"},"modified":"2025-09-22T19:15:54","modified_gmt":"2025-09-22T06:15:54","slug":"legal-considerations-for-contracting-in-new-zealand","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/employment\/legal-considerations-for-contracting-in-new-zealand\/","title":{"rendered":"Legal Considerations for Contracting in NZ"},"content":{"rendered":"\n

When your business needs help with a one-off project like migrating your email platform or periodic time-consuming tasks like payroll, you may want to explore contracting<\/a>. As part of this process, you will engage a contractor to perform certain services for your business. Your legal employment obligations towards contractors are different from your obligations towards employees. For example, your business does not need to hold contractor records or make deductions from their earnings. The main difference is that employees have employment agreements with your business, while contractors are free to work for anyone. It is crucial to understand how employees and contractors differ because it affects the way you treat them. This article will help you understand your legal employment obligations when engaging a contractor in New Zealand and how this differs from hiring employees.<\/span><\/p>\n\n\n\n

What Is a Contractor?<\/span><\/h2>\n\n\n\n

Contractors are self-employed workers. As a business owner, you may engage a contractor to perform services under a contract for services, or an independent contractor agreement. Contractors earn income by invoicing you, the principal, for the services performed and pay their own tax and ACC levies. They can choose to work as a sole trader or to incorporate a company.<\/p>\n\n\n\n

Unlike employees<\/a>, independent contractors do not have any rights under NZ employment laws. Instead, general civil law defines their rights and responsibilities. This means they are not entitled to sick leave or to get paid for not working on a public holiday. They cannot claim a personal grievance either. Depending on the industry, they may lack job security. If they register with Inland Revenue and meet the earnings criteria, they also have to pay GST on payments made to them. <\/p>\n\n\n\n

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Tip: Health and safety laws apply equally to employees and contractors. <\/span><\/p>\n<\/div>\n\n\n\n

Your Independent Contractor Agreement<\/span><\/h2>\n\n\n\n

When you engage a contractor, it is a good idea to provide them with an independent contractor agreement<\/a>. However, in some instances, your contractor may ask you to sign their own services agreement. These are similar contracts, although an independent contractor agreement can be more beneficial for the party receiving the services (you). Ultimately, your choice will depend on the industry and the type of services that your contractor provides. <\/span><\/p>\n\n\n\n

Your independent contractor agreement should be tailored to the specific arrangement, and include these key terms: <\/span><\/p>\n\n\n\n