90-day trial period New Zealand: what employers need to know

Published Saturday 15 August 2026

Table of contents

• What is a 90-day trial period in New Zealand?
• Who can use a 90-day trial period?
• How to set up a valid 90-day trial period
• Employer rights during a trial period
• Employee rights during a trial period
• Dismissing an employee during a trial period
• What makes a trial period invalid?
• Trial period vs probation period
• What happens when a trial period ends?
• Manage your team with confidence using Xero
• FAQs on 90-day trial periods in New Zealand

Key takeaways

• A 90-day trial period lets you assess whether a new employee is the right fit, with reduced risk of a personal grievance claim for unjustified dismissal. Since 23 December 2023, all New Zealand employers can use trial periods, regardless of business size.
• The trial clause must appear in a written employment agreement signed before the employee's first day of work. The employee must also have time to seek independent advice.
• Employees on trial periods still receive all minimum entitlements, including minimum wage, annual holidays, sick leave, and health and safety protections. They can raise personal grievances on all grounds except unjustified dismissal.
• If you need to dismiss an employee during the trial, you must give notice within the 90-day window and follow good faith principles throughout the process.

What is a 90-day trial period in New Zealand?

A 90-day trial period is a provision under section 67A of the Employment Relations Act 2000 that lets you assess a new employee's suitability for a role. During this time, you can end the employment without the employee being able to raise a personal grievance claim for unjustified dismissal.

The purpose of a trial period is to give you the chance to evaluate whether someone is the right fit for the job, while reducing the legal risk that can come with hiring. It's designed to encourage employers to take on new staff, knowing there's a straightforward exit if the arrangement isn't working.

Who can use a 90-day trial period?

Trial periods are available to any New Zealand employer, but there are specific rules about which employees can be placed on one.

Employer eligibility

Before 2023, only employers with fewer than 20 employees could use trial periods. The Employment Relations (Trial Periods) Amendment Act 2023 took effect on 23 December that year, and since then, every employer in New Zealand can include a trial period clause in employment agreements. There are no restrictions based on business size, industry, or number of employees. Whether you have one team member or 100, you're eligible to use a trial period.

Employee eligibility

Trial periods apply only to new employees. You can't place an existing employee on a trial period, even if they're moving into a different role within your business.

The employee must be genuinely new to your business. If someone has worked for you before in any capacity, they don't qualify for a trial period. This includes previous casual, fixed-term, or permanent employment.

Employees holding an Accredited Employer Work Visa (AEWV) are also excluded from trial periods. This restriction exists to protect migrant workers who may face additional vulnerabilities in the employment relationship.

How to set up a valid 90-day trial period

A single misstep in setting up a trial period while hiring new employees can make the clause unenforceable, which means standard dismissal protections apply. Here are some simple steps to follow to ensure compliance:

1. Include the trial clause in the employment agreement

Your employment agreement must be in writing and include a clear trial period clause. This clause should specify the length of the trial (up to a maximum of 90 calendar days) and state the notice period that applies if you decide to end the employment during the trial.

The wording needs to be specific. A vague reference to a "trial" or "probationary arrangement" isn't enough. The clause must clearly state that it's a trial period under section 67A of the Employment Relations Act 2000, and that the employee can't raise a personal grievance for unjustified dismissal during the trial.

2. Sign before the first day of work

Both you and the employee must sign the employment agreement before the employee starts work. This is one of the most common areas where trial periods become invalid. If the employee begins working, even for a few hours, before signing the agreement, the trial clause won't hold up.

Make sure the agreement is fully signed and dated before the employee's first day. Sending it well in advance gives both parties time to review the terms and seek advice if needed.

3. Inform the employee of their rights

You're required to let the employee know they have the right to seek independent advice about the employment agreement before signing. This could include advice from a lawyer, a union representative, or a community law centre.

Give the employee a reasonable amount of time to get that advice. Presenting an agreement and expecting a signature on the spot doesn't meet the good faith obligations that apply to all employment relationships in New Zealand.

Good faith means being open, honest, and communicative throughout the process. It's a practical foundation for a positive working relationship from day one.

Employer rights during a trial period

During the trial period, you have the right to assess whether the employee is suitable for the role. If you decide the arrangement isn't working, you can dismiss the employee without following the standard process that would otherwise apply for unjustified dismissal claims.

You're not legally required to give written reasons for the dismissal during a trial period. However, you do need to give the notice specified in the employment agreement.

As a best practice, consider giving regular feedback throughout the trial. Even though the trial period gives you flexibility, providing clear expectations and honest feedback helps the employee understand where they stand. It also creates a record of your assessment, which can be valuable if the validity of the trial is ever questioned. For more on this, see this guide to employee management.

Employee rights during a trial period

A trial period doesn't remove an employee's basic entitlements. Employees on trial periods have the same minimum rights as any other employee in New Zealand.

Those minimum entitlements include the following:

• Minimum wage: The employee must be paid at least the current minimum wage rate.
• Annual holidays: Entitlements begin from the first day of employment.
• Sick leave: The employee becomes entitled to sick leave after six months of continuous employment, including the 90-day trial period.
• Health and safety protections: The employer must provide a safe working environment.
• KiwiSaver: Employer contributions apply if the employee is enrolled.

Employees on trial periods can also raise personal grievances for reasons other than unjustified dismissal. These include grievances relating to discrimination, harassment, disadvantage, and unjustified action by the employer.

Good faith obligations apply throughout the trial. You must treat the employee fairly, honestly, and respectfully at all times.

Dismissing an employee during a trial period

If you decide the employee isn't the right fit, there are specific actions to take when ending the employment within the trial period. These are:

Give notice within the 90-day window

You must provide notice of dismissal within 90 calendar days from the employee's start date. The notice period itself can extend beyond the 90 days, but the notice must be given before the trial expires.

For example, if the employee started on 1 March and the agreement includes a two-week notice period, you'd need to give notice no later than 29 May (day 90). The employee's final working day could then fall after that date.If you miss the 90-day window, standard employment protections apply, and the employee could raise a personal grievance for unjustified dismissal.

How to follow good faith principles

Even though you don't need to follow a full disciplinary process during a trial period, you still need to act in good faith. This means treating the employee with respect and fairness when ending the employment.

Good practice when dismissing during a trial period includes the following steps:

1. Meet with the employee privately to let them know about your decision.
2. Explain your reasons clearly and honestly.
3. Listen to anything the employee wants to say in response.
4. Provide written confirmation of the dismissal, including the notice period and the employee's final day.

Following these steps shows you've acted fairly, even where the law doesn't require a formal process.

What makes a trial period invalid?

Several common mistakes can make a trial period clause unenforceable. If a trial period is found to be invalid, standard employment protections apply, and the employee can raise a personal grievance for unjustified dismissal.

A trial period may be invalid if any of the following apply:

• The employee started work before signing the employment agreement.
• The agreement doesn't include a trial period clause, or the wording is incorrect.
• The employee wasn't given reasonable time to seek independent advice.
• The clause uses the wrong legal terminology or doesn't reference section 67A.
• The employee has previously worked for the same employer in any capacity.
• The trial period exceeds 90 calendar days.

Getting the trial period right from the start is worth the effort. According to statistics from the Ministry of Business, Innovation and Employment (MBIE) covering 2015 to 2023, approximately 75% of trial period cases that were challenged in court were found to be invalid due to procedural errors. Taking care with the paperwork and process significantly reduces your risk.

Trial period vs probation period

Trial periods and probation periods are different arrangements, and it's worth understanding the distinction before deciding which to use.

Here are the key differences between the two:

• Legal basis: A trial period is defined under section 67A of the Employment Relations Act 2000, while a probation period has no specific statutory definition.
• Dismissal rights: During a trial period, the employee can't raise a personal grievance for unjustified dismissal, but during a probation period, standard personal grievance rights apply.
• Duration: A trial period is capped at 90 calendar days, while a probation period can be any length agreed between the parties.
• Eligibility: A trial period applies only to new employees who haven't worked for you before, whereas a probation period can apply to any employee, including existing staff moving into a new role.
• Process on dismissal: A trial period requires notice within 90 days and good faith, but a probation period requires a full fair process, including warnings and an opportunity to improve.
• Written agreement: A trial period must be in a written employment agreement signed before the first day,whereas a probation period should be in writing but isn't subject to the same strict requirements.

If you want the added protection of limiting personal grievance claims for unjustified dismissal, a trial period is the stronger option. A probation period is better suited when you want to set performance expectations with review points but are comfortable following a full process if things don't work out.

What happens when a trial period ends?

Once the 90-day trial period is over, the employee automatically transitions to standard employment protections. There's no additional paperwork or formal process required for this to happen.

From day 91 onwards, the employee has the full range of personal grievance rights, including the right to raise a claim for unjustified dismissal. Any performance concerns from that point forward need to follow a fair and reasonable process.

If you're happy with the employee's work, the trial simply ends and employment continues under the existing agreement. You don't need to issue a new contract or confirm anything in writing, although a brief conversation acknowledging the end of the trial can be a positive step.

Manage your team with confidence using Xero

Hiring new team members comes with paperwork, deadlines, and obligations. Xero's payroll and employee management tools help you stay on top of it all, from onboarding and pay runs to leave tracking and compliance records. With everything in one place, you can focus on building your team instead of chasing admin.

Ready to see how it works? Get one month free

FAQs on 90-day trial periods in New Zealand

Here are answers to some common questions employers have about 90-day trial periods.

Does a trial period apply to part-time employees?

Yes. Trial periods apply to part-time employees in the same way as full-time employees, provided the agreement is signed before the first day of work and all other requirements are met. The 90 days are counted as calendar days, not working days.

Can an employee resign during a trial period?

Yes. An employee can resign at any time during the trial period by giving the notice specified in their employment agreement. If the agreement doesn't state a notice period for resignation, reasonable notice applies.

What if an employee is sick during their trial period?

Sick days count toward the 90 calendar days and don't pause or extend the trial. You may choose to offer paid or unpaid sick leave before the six-month statutory entitlement kicks in, depending on your workplace policy.

Do trial periods apply to fixed-term employees?

Yes, as long as the employee is genuinely new to your business and all the standard requirements are met. The trial period clause must be in the written employment agreement and signed before the employee's first day.