A year or so ago, four New Zealand Uber drivers won a landmark case against the ridesharing app, which recognised them as employees, not contractors. The decision enabled these workers to claim rights and protections as Uber employees.

The ruling had broader implications for Kiwi businesses and how staff are categorised. Employment status entitles workers to minimum employment rights under New Zealand law, including the minimum wage, leave entitlements, and access to union membership and collective bargaining.

While the ruling was only made for the four drivers, legal experts believe the case could lead to more action against businesses over employment status. Uber has been granted the right to appeal the Employment Court decision. We’ll keep you updated.

If you are an employer, it’s important for you to be mindful of whether the people working for your business have employee or contractor status. They have different rights and responsibilities. They are paid — and taxed — differently. An employer will have different tax and employment obligations towards them.

Some employers may accidentally classify employees as contractors. Some workers may consider themselves to be independent contractors when their employment situation is really that of an employee. It’s a mistake that may have expensive consequences. There are some legal tests to help you tell the difference. We can help you work through them.

Your business should be clear on who is an employee and who is a contractor to avoid issues down the line. Discuss your contractor agreements with your advisers if you’re unsure.