Contractor or employee?

The Labour Inspectorate are running a national campaign inviting courier drivers to come forward if they think they may in fact be more appropriately classified as an employee. Across the courier industry the use of ‘contractors’ is common practice, however a recent case in the Employment Court has seen that many ‘contractors’ are in fact operating as ‘employees’, and therefore are entitled to the same rights as an employee, including holiday pay entitlements.

The impact may be for employers is that they not only have to reclassify these workers (if found to be employees rather than contractors), but will need to historically review the working patterns and retrospectively compensate these workers.

The case sets an interesting precedent that we expect will be applied across other industries where use of contractors is commonplace; think Uber drivers, ‘temp’ office workers, certain healthcare workers and industrial employees.

For more information, you can read the Employment NZ article here or this media article from NewsHub.