Types of employment engagement

Independent Contractors and Employees (text Updated 2026 in line with legislation changes)

With effect from February 2026, the law in respect of independent contractors changed.  With effect from that date and independent contractor agreement:

• must be in writing
• The worker cannot be restricted from working for other parties
• The worker must either have flexibility to do work when they want, or must be allowed to sub contract the work
• The contract can’t be terminated if the workers declines additional work

In the event that you don’t comply with the above rules, then the courts go back to the old rules where they look at the real working relationship. Employers should consider how much control

they have over the work, whether the person is integrated into the business, and whether they operate independently.

Getting this wrong can create tax, holiday pay and employment law risks. Before engaging someone as a contractor, employers should make sure the arrangement reflects the reality of how the person will work.

Casual, Low Guaranteed Hours and Permanent Employment

Casual employment can provide flexibility, but it may create risk when a worker begins working regular or ongoing hours. Employers should review whether a casual agreement remains suitable over time, especially where annual leave and other employee entitlements may apply.

Low guaranteed hours agreements can be a useful option for businesses with changing staffing needs. They can offer flexibility while still providing clearer expectations around hours, shift cancellations and employee entitlements.

Permanent full-time and part-time agreements are usually appropriate when the role has regular, ongoing hours. The agreement should clearly explain the expected work pattern, pay, duties and employee benefits.

Fixed-Term Agreements and Pay Arrangements

A fixed-term agreement must have a genuine business reason, such as covering parental leave, seasonal work or a defined project. The agreement should clearly explain when, how and why the employment will end.

The video also discusses salary and hourly pay arrangements. Employers should make sure that salaried employees continue to receive at least the minimum wage for all hours worked. For hourly paid employees, clear timekeeping and overtime approval processes can help manage costs and support fair working practices.

Review Your Employment Agreements

Employment law and workplace requirements can change over time. Businesses should regularly review their employment agreements and policies to make sure they remain clear, practical and appropriate for their workforce.

This video provides general information only. Employers should review current legal requirements and seek professional advice where needed.

Lisa Mackay
HRtoolkit Ltd
Managing Director (or Founder if you think that sounds better)
PGDip in Human Resource management and over 30 years experience working in HR with small businesses