New rules to protect contractors contemplated – MBIE consultation
Government, Consultation / 23 January 2020
The Ministry of Business, Innovation and Employment (MBIE) has issued a Discussion Document (Document) with the aim of providing better protection for contractors and seeks feedback on this. The purpose for the consultation is purportedly to address the limited rights and protection contractors receive as opposed to employees.
The government has identified concerns in the Document regarding independent contractors lack of rights and protection, including regarding:
• Workers who are employees but have been misclassified as an independent contractor, including to avoid minimum employment rights; and
• Workers who are in the ‘grey zone’ between employee and contractor status.
The Document sets out a number of proposed changes to provide support for workers in these positions, including with a view to:
• Ensuring employees receive minimum entitlements as required by law;
• Reducing the vulnerability of contractors by achieving a better balance of bargaining power between businesses and contractors; and
• Ensuring regulation encourages inclusive economic growth and competition.
A detailed overview of 11 options for change is set out, with options ranging from introducing penalties for misrepresenting an employment relationship as a contracting relationship to extending collective bargaining rights to some contractors.
Message for Employers
If you wish to view or provided feedback on the Document, more information is available here. Employers should consider the nature of the relationship with workers, to ensure these are appropriately classified. This will ensure they are receiving their correct entitlements and statutory requirements are met. Failure to do this means there is a risk of penalty for breaching minimum standards and claims by the worker relating to the status of their relationship.
If you have any questions about the status of your workers and your obligations, our team can help.
Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.