When you’re contracting or self-employed, you aren’t covered by employment law — including government minimum standards. Carefully check your contracts before you sign. If you can, get a lawyer to help.
Your contract should set out not just the work you’re being paid to do, but how you’ll be paid for it.
You can’t raise a personal grievance if you and a client you work for have a disagreement. Make sure you agree how disputes will be resolved as part of your contract.
If you’re not confident about signing a contract, eg because you don’t understand all the terms, get legal advice.
If your client wants you to stay on after the end date of your contract, make sure you get it in writing. The same goes if your client asks you to do any work that is different to what you agreed in your contract.
Ask them for a new contract, or for a variation to your existing contract, eg an extra page — or schedule — that sets out the changes.
You can generally only cancel a contract, based on the terms you’ve agreed. This applies to both sides — you or the person, or organisation, that has contracted you. A contract is legally binding, so it can be difficult for one party to cancel it if the reason is not set out in the contract’s terms.
If you want to challenge your contract ending before the date you’ve agreed, it would be a good idea to get legal advice first.
You should be entitled to the same benefits employers must legally offer permanent employees, eg a minimum number of days' paid holiday and sick leave.
You can only be taken on as a contractor if you’re truly an independent contractor, and not a fixed-term employee. Some organisations may offer you a fixed-term employment role, instead of a contracting role for short term projects or to cover for another employee’s extended leave, eg parental leave.
When someone offers you a fixed term role they should:
As a fixed-term employee you’ll be entitled to all the same benefits employers must legally offer permanent employees, eg a minimum number of days' paid holiday and sick leave. Because you get these benefits, your rate of pay may be less than if you were carrying out work and invoicing your client as a contractor.
You’ll also have your tax and ACC taken from your pay — as well as any other deductions you’re required to pay by law, eg child support, student loans.
Before you decide whether to take on a fixed-term role think about:
Your employer may offer you a fixed-term salary that is equivalent to that of a permanent employee. This is usually quite a bit lower than a contractor rate. Don’t be afraid to ask for more. Even though you’ll get benefits such as paid holiday and sick leave, you still have the uncertainty of finding new work when the fixed-term role ends. Ask to be compensated for this.
The amount of leave you’re entitled to will be in proportion to the length of your contract. If you’re unlikely to take advantage of paid leave, eg if you’re with an organisation for just two or three months, you may prefer to be taken on as a contractor and earn a higher hourly/weekly/monthly rate.
Does your contract end at a time of year when it’s hard to get new contracts, eg Christmas? Consider asking your employer to extend your contract by a couple of months, if it does.