A 90 day trial period can only be used by employers with fewer than 20 employees, and only if it is agreed in writing and signed before the employee starts their first day of work. Employment New Zealand sets out the exact wording required, and getting it wrong can make the trial unenforceable.
Who actually qualifies to use a 90 day trial?
Any employer with fewer than 20 employees at the time the employment agreement is signed, that's the headline rule, and it's been open to employers of any size since 23 December 2023 for anyone under that 20-employee threshold. A cafe with six staff, a sparky with one apprentice and a handful of contractors, a shop with two casuals and an owner, all qualify. Count heads across your whole business, not just the location the new person will work at, if you run more than one site.
There's one group this isn't available to. If you're an accredited employer hiring someone on an Accredited Employer Work Visa, you can't use a 90 day trial for that hire, regardless of your staff count. That's worth knowing if you're bringing someone in from overseas on an AEWV, because it's an easy clause to assume applies and it doesn't.
Source: Trial periods
What has to be in writing before day one?
The trial clause has to be in the signed employment agreement, and the agreement has to be signed before the person starts work, not on their first morning, not at the end of their first week. If someone has already started their first shift when they sign, the trial clause is void even if everyone agreed to it verbally beforehand. This is the single most common way employers lose the protection of the trial without realising it.
The clause itself needs specific wording, not a general "you're on trial for three months" line. It needs to state the trial period length, up to a maximum of 90 calendar days, that the employee can be dismissed during that period, and that the employee won't be able to raise a personal grievance for unjustified dismissal because of that dismissal. Employment New Zealand's website has the wording and a free downloadable agreement template that already includes it correctly, which is worth using rather than drafting your own from memory.
A rest home manager hiring night staff or an office administrator doing recruitment on top of their usual job are exactly the people who get caught out here, because the paperwork feels like a formality when you're focused on getting someone rostered on. It's the opposite. It's the part that actually matters legally.
What does the trial period let you do, and what doesn't it let you do?
During a valid trial, you can end the employment without the employee being able to raise a personal grievance claim for unjustified dismissal. You still have to act in good faith, you still have to actually pay out their final pay and any leave owed, and you still can't dismiss someone for a discriminatory reason, that part of the law doesn't disappear because a trial clause exists.
What it doesn't do is let you skip the basics. You still need a signed employment agreement in place regardless of whether you use a trial clause. Annual leave still accrues at four weeks after 12 months continuous employment, and sick leave still kicks in after six months, a trial period doesn't pause or remove either entitlement.
Source: Annual holidays
If you do decide to end employment during the trial, you still need to tell the person, give them the required notice as set out in their agreement, and pay them everything owed. A trial period removes the personal grievance risk for unjustified dismissal, it doesn't remove the requirement to treat someone decently on the way out.
Key takeaways
- You must employ fewer than 20 people to use a 90 day trial, counted across your whole business at the time the agreement is signed.
- The agreement must be signed before the employee's first day. Sign it after they've started and the clause doesn't hold.
- Accredited employers hiring on an AEWV cannot use a 90 day trial for that visa holder, no matter their staff count.
- Use Employment New Zealand's exact template wording rather than drafting your own trial clause, it's free and already compliant.
- A trial period covers dismissal grievances only. Good faith, final pay, and leave entitlements all still apply in full.
Frequently asked questions
Can I add a 90 day trial clause after someone has already started?
No. The agreement containing the trial clause must be signed before the person's first day of work, otherwise the clause has no legal effect even if both parties agreed to it verbally.
Does a 90 day trial period affect sick leave or annual leave?
No. Sick leave still begins after six months of continuous employment and annual leave still accrues toward four weeks after 12 months, regardless of any trial clause in the agreement.
What happens if I have exactly 20 employees?
The threshold is fewer than 20, so an employer with exactly 20 employees at the time of signing does not qualify to use a 90 day trial period for a new hire.
Can I still get sued during a trial period?
You're protected from a personal grievance claim for unjustified dismissal specifically. You're not protected from other claims, such as discrimination or a failure to act in good faith.
If you're drawing up an agreement for a new hire, get the role listed properly first at the free employer job posting page, so the trial clause is sitting in front of the right person from day one.