If you’re an employer, it pays to understand the different obligations you have to employees and to contractors — there are costs to getting things wrong.
It’s important to understand how employees and contractors differ because it affects the way you treat them. The main difference is employees work for you, while contractors work for themselves.
Other differences include:
Most employment laws do not cover contractors in the same way as employees. Unlike employees, contractors:
Also, your business does not:
Read more about the difference between employees and contractors (external link) on the Employment New Zealand website.
There can be consequences if you accidently classify employees as contractors. You may be liable for extra costs including:
You may also incur Inland Revenue and Employment Relations Authority penalties.
Read about what to do if you get it wrong (external link) on the Employment New Zealand website.