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The Employers and Manufacturers Association (EMA) says greater certainty around the status of contractors will be welcome news for businesses and workers alike.

Contracting is the preferred method of working for many New Zealanders, says EMA Head of Advocacy Alan McDonald.

"Whether people are operating in the gig economy or transitioning between jobs, contracting can offer flexibility, variety, better pay, opportunities at upskilling and work experience," says McDonald.

"Innovative business models utilising contracting are contributing to lifts in productivity as they enable employers to employ specialist skills in a short-term manner.

"Hiring skilled temporary or contract workers allows businesses to maintain a high-quality workforce and adapt swiftly to changing needs."

Although it will take until next year for these changes to become law, the gateway test gives employers a framework to meet their obligations, says McDonald.

"Clarifying the contractor status gives employers certainty without having to test it through the employment courts.

"By providing four clear and succinct factors that will assess whether a person is considered to be a contractor, the Government has responded to a pressing issue for businesses.

"We believe these changes will be workable, provide clarity and allow businesses to offer a variety of working models with confidence."