Tougher employment laws to protect contractors like Uber drivers being considered by Government

New penalties for businesses could be on the way as the Government looks to make yet more changes to employment law.

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New penalties for businesses who don’t comply could be on the way. Source: 1 NEWS

It wants to toughen measures to protect contractors like Uber drivers and cleaners saying some bosses are taking advantage of them.

Employment Relations Minister, Iain Lees Galloway says some people are being employed in the wrong category.

"There's some people who are actually employees who are misclassified as contractors and should be employees and are missing out on some rights like the minimum wage," he says.

To protect contractors, the Government is putting out proposals which suggest increasing proactive targeting by labour inspectorates, introducing penalties for employers who fail to comply, or even changing the definition of "employee" and extend the right to bargain collectively for some contractors.

"At the moment if you're a contractor, you can't join a union, you can't bargain collectively and that puts a lot of people into a vulnerable position," says Mr Lees Galloway.

The Government says some employers are using contractors as a way to save money.

"Contractors can get in situations when they are completely controlled by the company, completely dependent on the company and can't work for anybody else," says Jared Abbott of First Union.

But business say contracting has bonuses, including flexibility.

"For example that would have consequences for industries like the film industry in New Zealand, the IT industry and labour hire," says Kirk Hope of Business New Zealand.

The latest proposals come as businesses have already expressed concerns about the number of labour law changes being forced on them by the Government.

That includes changes to fair pay agreements, pay equity rules and a toughening up on migrant worker exploitation.

Businesses say it's about getting the balance right.

"There are a range of different sectors where portfolio work can be good for a person, however it can be a little bit more challenging when you've got one single employer," says Mr Hope.

The Government thinks an increasing number of people will become contractors and this could help about 70,000 Kiwis.