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Am I an Employee?

When you work, you can be either an employee or a contractor. It’s important to know the difference, and which one you are so that you know what rights and responsibilities you have. Being an employee or a contractor can affect things like how much you earn, the way you pay tax, your holidays and leave, and many other areas of your work. Also, there are different types of employees.

This section gives you some information about employee statuses.

What is an employee?

An employee is anyone who has agreed to work for some form of payment under a contract of employment (written or oral). Your pay can include wages, salary, or commission.

An employee is not:

  • a self-employed or independent contractor;
  • a volunteer who does not receive a reward for working;
  • in some cases, a person who is engaged in film production.

Employees have legal rights to minimum wage, fair treatment, holidays and leave, and a number of other rights under employment law. Contractors do not have these rights.

How do I know if I am an employee or a contractor?

It can sometimes be difficult to work out whether you’re an employee or a self-employed contractor. The difference is important as different laws relating to employment standards will apply depending on your employment status. The things to look at to consider whether you’re an employee or a contractor 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? (Employees don’t make their own tax payments.)
  • Who provides the equipment? (Employees generally don’t provide their own equipment.)
  • Who controls how and when the work is done? (Contractors can generally control how their work is completed to a certain degree.)
  • Who has the power to hire other people to do the work? (Employees can’t hire their own help.)

What types of employees are there?

Usually, employees are employed either on a full-time or a part-time basis. Full-time means anyone who works 30 hours or more per week at the same job.

You can also be employed as a permanent, fixed term or casual employee.
Permanent employees expect employment on an ongoing basis.
Fixed-term employees expect to keep their job for a fixed amount of time – e.g. 1 year. A good reason is required to place employees on fixed-term, otherwise, an employee must either be permanent or casual.
Casual employees have no guaranteed hours and work on as required basis.

Am I a casual or/and a temporary worker?

You’re a casual/temporary worker if you have been employed on a “work when needed” basis.

A casual employee can’t expect to have work every day or on an ongoing basis. The job has no guarantee of regular or permanent employment. However, if you’re working on a casual basis, you’re still entitled to be treated fairly and to receive many of the entitlements of a permanent worker.

If you have a regular pattern of work hours each week, then you might actually be a permanent part-time worker rather than a casual employee, which entitles you to more rights. In some cases, the courts have said that casual employment can change into permanent employment where a worker had a reasonable expectation of continuous employment through their continuous work pattern.

What entitlements do I have as a casual worker?

  • You should be paid at least the minimum wage, plus 8% holiday pay (because you don’t get annual leave);
  • Your employer should pay your taxes to IRD;
  • Health and safety rules apply and you should be kept safe at work.
  • You don’t have to accept work. You can refuse shifts if you want (but at the same time your employer also doesn’t have to offer you any shifts or work);
  • You may not qualify for parental leave, sick leave or bereavement leave.
  • If your employer wants to dismiss you, they will still need to follow a correct process and give you a legitimate reason for dismissing you.
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