Unpaid Work Trials In New Zealand: Employer Rules Before Hiring

Hiring your next team member is a big step - especially when you’re running a small business and every hire has a real impact on customer experience, productivity, and cashflow.

That’s why many business owners ask the same question: “Can I run an unpaid work trial to see if they’re a good fit?”

An unpaid work trial can sound like a practical way to reduce hiring risk, but in New Zealand it can create serious compliance issues if it crosses the line into “work” that should be paid.

Below, we’ll walk you through what an unpaid work trial is, why it’s often risky, what the law generally expects, and what you can do instead to assess candidates while still protecting your business from disputes and penalties.

What Is An Unpaid Work Trial (And Why Do Employers Use Them)?

An unpaid work trial is usually when a candidate comes in and performs tasks for a short period (for example, a few hours or a shift) so you can assess:

• their skills and speed (e.g. coffee-making, invoicing, machine operation)
• their reliability and attitude
• how they interact with customers or the team
• whether they can follow instructions and workplace processes

From a business owner’s perspective, it’s easy to see the appeal. Interviews don’t always tell you how someone performs on the job, and a bad hire can cost you time, money, and momentum.

The legal problem is that many “trials” look and feel like normal work - and under New Zealand law, if a person is effectively working in your business (particularly if you’re getting productive value from what they do), they’ll usually need to be paid at least minimum wage.

In other words: if it walks like a shift and talks like a shift, it may legally be a shift.

Are Unpaid Work Trials Legal In New Zealand?

There isn’t one simple rule that applies to every industry and every trial. What matters is the reality of the arrangement, not just what you call it.

As a general practical guide for employers, unpaid trials are often high-risk because they commonly involve a candidate doing real work under your direction, in your workplace, for your benefit. In many cases, what’s described as a “trial” will still be treated as work that must be paid.

When you’re assessing whether an unpaid work trial is likely to be lawful, the key question is usually:

Is the person genuinely just being assessed, or are they actually working for you?

Situations Where “Unpaid” Is Most Likely To Be A Problem

These scenarios commonly create legal risk:

• They do the same tasks as paid staff (serving customers, making products, cleaning, admin work).
• You roster them on for a set start/finish time like a normal shift.
• You supervise and direct them the same way you direct employees.
• The business gains value from their output (sales, production, cleared backlog, customer service).
• It’s more than a very short skills demonstration and becomes “helping out for the day”.

If you’re thinking “that’s exactly what I want them to do so I can see if they’re capable,” you’re not alone - but this is precisely why unpaid trials so often end up being treated as work that should have been paid.

Situations Where “Unpaid” May Be More Defensible (But Still Needs Care)

There are some lower-risk assessment options, but they still need to be set up carefully - and even then, they can be treated as paid work depending on how they’re run and what the person actually does:

• A short, controlled skills test (e.g. demonstrate a specific task for 10–30 minutes), where the focus is assessment rather than productive work.
• Observation or shadowing, where the candidate observes your workplace and does not perform productive tasks.
• Structured work experience arranged in a compliant way (this is a separate category and needs clear documentation and boundaries).

If you want to use work experience-style arrangements, it’s worth setting expectations clearly in writing - for example with a Work Experience Agreement - so everyone understands what the person will (and won’t) do.

Even then, you should treat “unpaid” as the exception, not the default. If there’s any real value flowing to the business from the person’s labour, paying them is usually the safest move.

What Laws And Legal Risks Should Employers Keep In Mind?

Unpaid work trials touch multiple legal obligations. Here are the main ones small businesses need on their radar.

Minimum Wage Obligations

If a person is effectively an employee (or is performing work that looks like employment), you may need to pay at least the minimum wage under the Minimum Wage Act 1983.

This is where many unpaid work trial disputes start: someone does a “trial shift”, later alleges they were an employee, and seeks backpay (sometimes with penalties).

Employment Status And “Real Nature” Tests

Under the Employment Relations Act 2000, courts and the Employment Relations Authority generally look at the real nature of the relationship.

So even if you tell someone “this is just an unpaid trial,” that wording won’t necessarily protect you if, in practice, they were:

• working under your control/direction
• integrated into your business operations
• expected to perform tasks that benefit the business

This is also why it’s important to have the right documents in place when you do decide to hire - a properly tailored Employment Contract is a key part of setting clear expectations and reducing disputes later.

Health And Safety Duties Still Apply

Even if someone is only on-site briefly, you still have duties under the Health and Safety at Work Act 2015 to take reasonably practicable steps to keep people safe.

In practical terms, a trial can’t be treated like a “casual favour”. If the person is in your workplace:

• they may need an induction (even if short)
• they need appropriate supervision and training for any risky task
• you should manage hazards (including customer-facing risks, equipment, and manual handling)

Discrimination Risk During Recruitment

Work trials can also create exposure under the Human Rights Act 1993 if decisions are (or appear to be) based on protected characteristics.

For example, if you invite some candidates to trial but not others, or you end a trial early for reasons that could be interpreted as discriminatory, you may be creating a problem where you intended to reduce risk.

Good recruitment processes help - consistent criteria, the same assessment format for candidates, and clear notes about what you assessed.

Privacy And Candidate Information

If you collect CVs, references, interview notes, trial assessment notes, or ID documents, you’re handling personal information and should be thinking about the Privacy Act 2020.

A clear Privacy Policy (and internal handling practices) helps you explain what you collect, why you collect it, how you store it, and when you delete it.

What Should You Do Instead Of An Unpaid Work Trial?

If your goal is to reduce hiring risk (totally fair), there are safer options that still let you assess real capability.

Option 1: Run A Paid Trial Shift (Often The Cleanest Solution)

In many industries (hospitality, retail, trades), the simplest approach is:

• bring the candidate in for a short shift (e.g. 2–4 hours), and
• pay them at least minimum wage for that time.

This approach aligns the incentives and reduces arguments later about whether it was “work”. You can still make it clear it’s an assessment, but you’re not relying on “unpaid” as the justification.

From a cost perspective, paying a few hours of wages is often far cheaper than dealing with a complaint, backpay claim, or reputational damage.

Option 2: Use A Probationary Period (With Care)

A probationary period can be a helpful tool where you hire the person, but agree there will be an initial period where performance is closely monitored.

Probation doesn’t remove your obligations as an employer (you still need to act fairly and follow a proper process if you want to end employment), but it can help you frame expectations and performance management early.

Option 3: Consider A Trial Period (If You’re Eligible)

NZ has rules around trial periods (commonly referred to as “90-day trials”). Eligibility and requirements can be technical, and the law in this space has changed before, so you’ll want to get up-to-date advice on whether you can use them and how to document them correctly.

This is one of those areas where getting guidance early can save a lot of headaches. If you’re unsure, a quick chat with an Employment Lawyer can help you confirm what’s available for your business size and situation.

Option 4: Use Skills Testing That Doesn’t Produce “Business Output”

Instead of putting someone into a live environment with customers and production pressures, you can assess skills in a controlled way, such as:

• a short practical task using sample data (for admin/bookkeeping roles)
• a simulated customer scenario or roleplay
• a portfolio review or supervised demonstration

The more you can structure it as a test (rather than a shift), the easier it is to justify as an assessment process.

Option 5: Engage A Contractor For A Short Project (Only If It’s Genuinely Contracting)

Some businesses try to “trial” people by engaging them as contractors first. This can work in the right context - but only if the relationship is genuinely a contractor relationship and not employment in disguise.

If you go down this path, you’ll want the right paperwork (and the right working arrangements) in place, such as a Contractors Agreement.

Misclassifying an employee as a contractor is a common and expensive mistake, so this is another area where tailored advice matters.

How To Run A Work Trial The Right Way (If You Decide To Do One)

Sometimes, you’ll still want a short practical assessment because it’s the only realistic way to check core skills (for example, a barista pour test, a trade tool test, or a customer service scenario).

If that’s you, here are practical steps to reduce risk.

1) Decide Whether It Will Be Paid Or Unpaid

If the candidate will:

• serve customers
• produce saleable items
• replace a rostered staff member
• do meaningful cleaning/stocking/admin tasks

…then paying them is usually the safer approach.

If you’re trying to keep it unpaid, you should keep the activity very short, highly supervised, and focused on demonstration rather than output.

2) Set Clear Boundaries In Writing

Before the trial starts, confirm (in writing) basics like:

• date, start time, and end time
• what tasks they will do (and what they won’t do)
• who will supervise them
• what you’re assessing (speed, accuracy, customer approach, safety, etc.)
• whether it’s paid, and if so, the rate and when you’ll pay

This isn’t about creating red tape - it’s about making sure you and the candidate are on the same page, so you don’t end up with a “they said / we said” dispute later.

3) Keep It Consistent And Non-Discriminatory

Try to apply the same assessment format to candidates for the same role, unless there’s a genuine reason not to.

Consistency helps you defend your decision-making if a candidate later claims unfairness or discrimination.

4) Don’t Forget Confidentiality And Business Information

Even a short trial can expose your systems, pricing, supplier details, scripts, and customer information.

If the candidate will have access to sensitive information, consider having them sign an Non-Disclosure Agreement before they start.

This is especially relevant where you’re training someone on a unique process, or where customer lists and pricing are a real business asset.

5) Treat Health And Safety Like It’s Day One (Because It Is)

Give a basic induction that matches the tasks and risks involved. For example:

• how to safely use equipment
• what PPE is required (if any)
• what to do if there’s an incident
• who to ask for help
• any “no-go” zones or restricted tasks

If they’re injured during a trial, “they weren’t technically an employee” is not a strategy - you still need to show you took reasonable steps to keep people safe.

6) Record The Outcome And Next Steps

After the trial, document:

• what you observed (fact-based notes)
• whether you’re offering employment
• if you’re not proceeding, keep the reason professional and consistent with your assessment criteria

If you do offer the role, make sure you move quickly into proper onboarding and paperwork, including a tailored Employment Contract that reflects the role, hours, pay, and any agreed probation or trial arrangements.

Key Takeaways

• An unpaid work trial can easily cross the line into “work” that should be paid, especially where the candidate performs productive tasks that benefit your business.
• In New Zealand, compliance issues can arise under multiple laws, including minimum wage rules, employment relationship rules, health and safety obligations, anti-discrimination obligations, and privacy obligations.
• If you want to assess practical skills, a paid trial shift is often the cleanest and lowest-risk option.
• If you use an assessment, keep it short, structured, and focused on demonstration rather than business output - and set expectations clearly in writing.
• Consider safer alternatives like probation/trial periods (where applicable), controlled skills testing, or properly documented arrangements like a Work Experience Agreement.
• Protect your business by handling confidentiality, privacy, and onboarding properly - including documents like an Non-Disclosure Agreement and a tailored Employment Contract.

Note: This article is general information only and isn’t legal advice. Because employment arrangements are fact-specific, you should get advice for your particular situation.

If you’d like help setting up a legally safer hiring process (including paid trials, probation terms, trial periods, or employment contracts), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.