Agency temp or labour-hire contractor? Who pays you, who signs your timesheet, and your rights

Agency temp or labour-hire contractor: how to tell which you are

Employment New Zealand calls the usual temping set-up a triangular employment situation: an agency employs you and sends you on assignments to another organisation, the host, which directs your day-to-day work. You are the agency's employee, with every usual employment right. The same agencies also place people as contractors, and the paperwork tells you which you are:

Inland Revenue's own examples of schedular payments include a builder contracted to a labour hire business, and an IT project manager placed by a recruitment agency with one of its clients. Under schedule 4, part J of the Income Tax Act 2007, payments under a labour-hire arrangement have a standard rate of 20%. You can choose a different rate on the IR330C, but Inland Revenue says you cannot go below 10% without applying for a tailored tax rate.

Since 21 February 2026, the gateway test in section 6 of the Employment Relations Act 2000 decides some of these cases outright, and it expressly covers work for a third party that an agency arranges. You are a specified contractor, not an employee, if all five parts are met: a written agreement says you are a contractor or not an employee; you are free to work for others; you are not required to work at set times or for a minimum period, or you may subcontract; the arrangement cannot be ended because you turn down extra work; and you had a reasonable chance to take independent advice. Our article on contractors, timesheets and the gateway test explains why set hours matter. If any part is missing, the old test applies: the real nature of the relationship decides, and the label in the contract is not decisive.

Who signs your timesheet, who pays you, and late approvals

As an agency employee, the host may sign or approve your timesheet, but in doing so it is confirming your hours to the agency. The agency is your employer. It must pay you at least the minimum wage, $23.95 an hour for adults from 1 April 2026, for every hour you work, and it must keep the wages and time record that shows those hours.

That matters when the host is slow to approve hours, or disputes them. Employment New Zealand says that if timesheets are forgotten or not correct, the employee must still be paid, and the employer should talk to the employee and agree what to do. A late sign-off at the host is between the agency and its client; the wages for hours you worked are owed to you by the agency. If you are told you cannot be paid until the host approves, raise it with the agency in writing and keep the reply.

As a labour-hire contractor, you are paid under your contract, so check what it says about approval, invoicing dates and payment terms. The labour-hire business is the party you invoice and the one that owes you, even when the host's approval is what holds things up.

Holiday pay on temp assignments, including 8% pay as you go

An agency employee earns the same holidays and leave as anyone else, from the agency. After 12 months of continuous employment, that is at least 4 weeks' paid annual holidays. Instead of that, section 28 of the Holidays Act 2003 allows holiday pay to be added to your pay as you go, at 8% or more of your gross earnings, but only if all of these are true:

• you are on a genuine fixed-term agreement of less than 12 months, or your work is so intermittent or irregular that giving you 4 weeks' holidays is impracticable;
• you agreed to it in your employment agreement; and
• it is paid as an identifiable amount, usually its own line on the payslip.

Employment New Zealand stresses that being called "casual" does not qualify you on its own: your actual work pattern does. A series of fixed-term assignments of under 12 months each can keep pay as you go. But if it was used wrongly and you have been with the agency 12 months or more, you are entitled to 4 weeks' paid annual holidays as well, and you keep the 8% already paid.

Sick leave works the same way. You are entitled to 10 days a year after 6 months' continuous employment with the agency, or after 6 months in which you averaged at least 10 hours a week and worked at least an hour every week or 40 hours every month. Our article on sick leave for casual workers covers the test in detail. Public holidays are paid by the agency too, at time and a half if you work one. And if you are a KiwiSaver member aged 16 to 64, the agency adds the compulsory employer contribution, at least 3.5% of your gross pay.

A labour-hire contractor gets none of this, so the rate has to cover the weeks you take off and the days you are sick.

Triangular employment rules since 27 June 2020: raising a grievance that involves the host

Before 27 June 2020, an agency temp who was mistreated at the host could only raise a personal grievance against the agency. The Employment Relations (Triangular Employment) Amendment Act 2019 changed that. The host is now a "controlling third party" if it has a contract with your employer under which you work for its benefit, and it directs your work much as an employer would. So a host that directs your day-to-day work is likely to be one.

The steps run in this order:

1. Raise the grievance with the agency within 90 days of what happened, or of when you found out (12 months for sexual harassment). Our article on personal grievances covers how.
2. Notify the host within the same period, in writing, that you consider its actions caused or contributed to the grievance. Later notice needs the host's consent or the Employment Relations Authority's leave.
3. If it goes to the Authority, you or the agency can apply to join the host. The Authority must join it if the host was notified properly and there is an arguable case that it is a controlling third party whose actions caused or contributed to the grievance.

Once the host is joined, the Authority can order it to reimburse lost wages or pay compensation, in proportion to its share of the blame. A change in force from 21 February 2026 limits that: no compensation from the host where your own actions contributed, and no lost wages where that contribution was serious misconduct. Employment New Zealand's advice is to start by talking to whichever party the problem is with. These rules are for employees, so a labour-hire contractor cannot use them.

Keeping your own record so disputed hours can be proven

When the host and you disagree about hours, the record usually decides it. The agency must keep a wages and time record, and section 132 of the Employment Relations Act says that if it failed to and that hurt your claim, the Authority may accept your account of the hours unless the agency proves otherwise. A record you kept at the time is what lets you give that account in detail.

Keep each assignment apart: the host, the site, and for every shift the date, start, finish, breaks and who signed or approved the hours. Keep a copy or photo of every timesheet you hand in. Your Timesheets at jobtracker.co.nz does this free on every plan: add each host as its own place, type the start, finish and break for each day with a note of who approved it, and every change is kept in the entry's history. When the week goes to the agency, mark it sent, and any later change says so.

If you are temping while on Jobseeker Support, your earnings also affect your payment; our article on temping while you job hunt explains how.

Keep every assignment on your own record