3 New workplace reforms
Sweeping payroll, privacy and KiwiSaver reforms are just some of the big changes facing Kiwi employers in 2026, writes employment lawyer Sanam Ahmadzadeh Salmani of Employment Hero, a recruitment and HR platform for businesses.
From payroll reform to KiwiSaver increases and tighter privacy obligations, New Zealand employers are heading into one of the most significant periods of workplace regulation change in years. The next 12 to 18 months will reshape how businesses hire, pay and manage their people. Here are three workplace updates employers should plan for now.
Holidays Act reform
Advice: Strengthen payroll foundations
The Holidays Act 2003 has been a persistent compliance challenge, particularly for businesses with variable hours, overtime and allowances. Reforms are expected to simplify calculations by moving toward an hours-worked model and removing the so-called ‘parental leave penalty’.
Now is the time for employers to audit leave balances, address legacy issues and ensure payroll systems can adapt to new calculation rules. Use a modern, NZ-compliant payroll platform to apply leave and public holiday rules accurately and consistently as reforms come into force.
Employment Relations Amendment Bill 2025
Advice: Review contracts
The proposed Employment Relations Amendment Bill 2025 will significantly affect how employers classify, manage and exit workers.
A new ‘gateway test’ for contractors will require businesses to reassess whether contractors genuinely meet the criteria, particularly in sectors relying on freelancers or seasonal labour.
The Bill also limits unjustified dismissal claims for employees earning over $200,000. Together, these changes increase the importance of clear contracts, defensible pay structures and transparent dispute processes.
KiwiSaver changes
Advice: Plan for rising costs
Budget 2025 confirmed several KiwiSaver changes already affecting payroll. Government contributions have halved, high earners are no longer eligible, and 16- and 17-year-olds are now included.
Looking ahead, default employer and employee contribution rates will rise from 3% to 3.5% on 1 April 2026, followed by a further increase to 4% in 2028. For SMEs, these incremental changes add up. Updating payroll settings early and factoring higher contributions into forward budgets will help avoid unwelcome surprises.
