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Difference between self employed contractor and employee

Am I a self employed contractor or an employee?

It can sometimes be difficult to assess whether a person is an employee or a self-employed contractor. The difference is important, as different rules relating to employment standards will apply depending on a person's employment status.

The things to look at include:

  • Was the intention to be a self-employed contractor or an employee?
  • Is there any written agreement or correspondence that shows your intention?
  • Who makes the tax payments to the Inland Revenue Department?
  • Who provides the equipment?
  • Who controls how and when the work is done?
  • Who has the power to hire other people to do the work?

Click here for information on who is an employee.

If a person is an employee, then he or she will have employee rights under the Employment Relations Act and other employment laws. If a person is a self-employed contractor, then he or she will not be covered by the Employment Relations Act or some of the other employment laws, such as the Holidays Act 2003. The general civil law determines most of the rights and obligations of self-employed contractors.

The law relating to health and safety applies to both employees and self-employed contractors, although the expectations in each case are different. Click here for a guide to health and safety law.

If you cannot work out whether you are an employee or a self-employed contractor, the Department of Labour's mediation services can help you settle the real nature of the relationship.

See our publication A Principals Guide to Contracting to meet the HSE Act 1992 for guidance on your Health and Safety obligations to contractors and business people who work for you.



 

 

Date Modified: Thursday, 31 May 2012

Disclaimer: The content on this website covers common problems. It will not answer every question and should not be used as a substitute for legislation or legal advice.State sector employers and employees may be affected by some differences in the laws that apply to them (e.g. State Sector Act 1988).The Department of Labour takes no responsibility for the results of any actions taken on the basis of information on this website, nor for any errors or omissions.