New Zealand's Employment Law in 2025: Key Changes Impacting Employers and Employees

The Employment Relations Amendment Bill 2025

In June 2025, the Government introduced the Employment Relations Amendment Bill 2025. The proposed reforms focus on unjustified dismissal claims, contractor verses employee distinctions, and personal grievance remedies. 

The Bill introduces a $180,000 annual salary threshold for unjustified dismissal claims. Under this proposal, employees earning over this threshold would not be eligible to bring unjustified dismissal claims unless their employment agreement specifies otherwise. This change would apply to new employees immediately and to all employees after a 12-month transition period. Another important change is the proposed ‘gateway test’ for distinguishing between employees and independent contractors. This test will assess various factors, including the written agreement, whether the individual has the freedom to work for other businesses, and whether there are restrictions on working hours or the ability to subcontract. This test aims to clarify what qualifies as an employee relationship versus a contractor arrangement, addressing longstanding issues around worker classification.

There is also a proposal which allows for employers to make an offer to employees for the purpose of reaching an agreement to terminate the employment relationship, and for the employer to pay the employee a specified sum in full and final settlement of any cause of action arising out of the employment relationship. No employment problem needs to be in place for the employee to do this and such an offer is not ground for a personal grievance.  Any agreement under this proposed amendment will need to be in writing and signed by the parties and refer to the legislation. 

The 30-day rule will be removed, allowing employers and employees to negotiate terms and conditions from the start of employment without the need for the employee’s terms and conditions to be those set out in the applicable collective employment agreement. The changes also remove the requirement for an employer to utilise the active choice form currently in place and the requirement that the employer must pass on information provided specifically by a union. 

The remedies for personal grievances, will be limited or even eliminated for employees who contribute to the situation that led to the grievance or who are found guilty of serious misconduct. 

Submissions on the Bill closed on 13 August 2025 and is currently before Select Committee.

Key Changes already passed in 2025 

Employment Agreement Access
From 30 March 2025, employers are required to provide employees with access to their individual employment agreements within seven working days of a request. This requirement aims to ensure that all employees have clarity on their terms of employment and their rights in the workplace.

Minimum Wage Increase
From 1 April 2025, New Zealand's adult minimum wage increased to $23.50 per hour and the starting out wage increased to $18.80 per hour. Employers will need to review their pay structures to ensure they comply with these new minimum standards.

Pay Secrecy Protections (Employment Relations Amendment Act 2025)
Pay secrecy clauses were commonly included in employment agreements and would allow employers to take disciplinary action against an employee disclosing what their salary or wage rate was.  From 26 August 2025, the Employment Relations (Employee Remuneration Disclosure) Amendment Act 2025 provides protections for employees who wish to discuss their pay with others. This new law now prohibits employers from taking action, including disciplinary action, against employees who share or compare their salaries with colleagues, ensuring transparency in pay and helping to close the gender and ethnic pay gaps.

Wage Theft Criminalization (Crimes (Theft by Employer) Amendment Bill)
On 14 March 2025, the Crimes (Theft by Employer) Amendment Bill came into force.  The change to the Crimes Act 1961 aims to criminalize unauthorised wage deductions by employers. Intentional non-payment of wages by employers without reasonable excuse can now be treated as theft. This is seen as a major move to protect workers from exploitation, particularly those in vulnerable or lower-wage roles, ensuring employers cannot withhold pay without consent or justification. Employers could face imprisonment for up to a year and a fine of up to $30,000.00.

What does this mean for employers 

The Minister has indicated that the proposed changes will come into effect by the end of 2025.  Therefore, employers should:

1. review their employment agreements with employees to ensure they are up to date and comply with current standards and obligations.
2. ensure that workers are paid the correct amount and be cautious around payroll deductions.

Your TP employment team can aptly assist you with compliance with these new rules and obligations. Please don’t hesitate to get in touch.