2026 is shaping up to be a significant year for employment law reform in New Zealand. Employers and employees alike can expect major legislative change across employment relations, leave entitlements, health and safety, and minimum wage rates.
Employment Relations Amendment Bill
Introduced in June 2025, the Employment Relations Amendment Bill has reported back from Select Committee and is awaiting its second reading. It may be passed during 2026.
Overview
The Bill is intended to increase labour market flexibility and make four key changes:
- Greater certainty around whether a worker is classified as an employee or a contractor.
- Stronger consideration of employee behaviour and accountability within the personal grievance process.
- Introduction of a salary threshold above which personal grievances for unjustified dismissal cannot be pursued.
- Removal of the 30-day rule requiring new employees to be employed on collective agreement terms where a collective applies.
The Bill has attracted mixed responses and remains politically contested as it progresses through Parliament.
Proposed Employment Leave Act (Holidays Act replacement)
In September 2025, the Government confirmed its intention to repeal the Holidays Act 2003 and replace it with a new Employment Leave Act. Draft legislation has not yet been released.
While details are still being developed, the Government has outlined key design features that signal a fundamental shift in how leave is calculated and paid. These include:
- Annual leave and sick leave accruing continuously from day one, calculated in hours rather than weeks or days.
- The ability for employees to take part days of leave using accrued hours.
- Sick leave accruing in direct proportion to contracted hours.
- Casual employees and hours worked beyond contracted hours being compensated with an upfront leave payment, currently proposed at 12.5%.
- All leave paid at the same hourly rate, based on the employee’s base pay on the day leave is taken, with fixed allowances continuing to be paid during leave.
- Revised public holiday and alternative holiday entitlements using hour-based accrual and a clearer test of whether the employee would have worked on the day.
As this reform progresses, employers will need to prepare for material payroll and systems changes.
Proposed health and safety reforms
Reforms to the Health and Safety at Work Act 2015 are expected to progress during 2026, following policy announcements signalling a refocus of New Zealand’s health and safety framework. The proposed reforms aim to streamline compliance and reduce unnecessary regulatory burden.
Key proposals include:
- A stronger focus on managing critical risks that could cause death, serious injury or illness.
- Simplified obligations for small, low-risk businesses, limited to managing critical risks and providing basic facilities.
- Clearer boundaries between health and safety legislation and other regulatory regimes to reduce overlap.
- Reduced reporting obligations, with WorkSafe notification limited to significant incidents.
- Clearer separation between governance responsibilities and operational management duties.
- A new approach to Approved Codes of Practice, allowing industries to propose codes for Government approval.
- Changes to landowner liability so responsibility for recreational activities sits with activity organisers rather than landowners.
The Ministry of Business, Innovation and Employment (MBIE) has described this work as a staged reform programme. The current focus is on sharpening the purpose of the Act and clarifying its scope. Further legislative and operational changes, including WorkSafe-related reforms and sector-specific relief, are expected to follow, although timing remains uncertain.
New minimum wage from April 2026
The Government has confirmed that the adult minimum wage will increase to $23.95 per hour from 1 April 2026, an increase of 45 cents from the current rate.
The starting out and training minimum wages will also increase to $19.16 per hour, remaining at 80% of the adult minimum wage.
With substantial reform on the horizon, staying ahead of these changes will be essential. Our expert Employment Law team will continue reporting as these reforms progress and keep you updated on how these changes may affect your business.
