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2: Ensuring Government investment is directed towards education and careConversations with a number of home-based ECE service providers indicate that educators are typically treated as self-employed contractors.  This means many educators are excluded from receiving minimum entitlements such as the minimum wage, paid annual leave, and sick leave.  It also means that educators cannot enter into collective bargaining.

As contractors, educators are responsible for their own tax.  The use of their home and other associated costs like electricity and heating are able to be claimed as a tax deduction.  This is done through Inland Revenue. 

In situations where educators are being paid directly by the parent, some service providers are not passing on any of the Government ECE subsidy they receive to educators. 

Why is it a problem?

The definition of home-based ECE in the Education Act could be a barrier to adequate working conditions for educators.  A ‘home-based education and care service’ is defined in section 309 of the Act as the provision of home-based care for ‘gain or reward’ in the home.  How ‘gain or reward’ is interpreted may contribute to the minimal payments educators receive. 

The Education Act’s definition of a ‘service provider’ may also a problem.  The Act defines a service provider as ‘the body, agency, or person who (or that) arranges, or offers to arrange (that) education or care.’ The word ‘arranges’ suggests that the service provider is quite removed from the education and care being delivered by an educator.  It does not frame service providers as overseeing and supporting the work of educators.

Educator wages and working conditions are structural factors that influence quality.[7]  Poor working conditions can increase stress and educator turnover.  This can limit an educator’s ability to form quality relationships with children.  The current rules in home-based ECE do not appear to be supporting good working conditions for educators, which may impact on the quality of ECE.

What changes are we proposing and why?

  • Change the definition of ‘service provider’ in the Education Act 1989 to better align with the Government’s expectations that service providers are responsible for the delivery of education and care. 

This change would better align with the Government’s expectations that service providers are responsible for the delivery of education and care and that educators are fairly paid for their work. 

  • Change the definition of ‘home-based education and care service’ in relation to the phrase ‘gain and reward’ to better align with Government’s expectations that educators are fairly paid for their work. 

This change would better align with the Government’s expectations that home-based educators are fairly paid for their work.

  • Improve pay and conditions for educators:
  • Require home-based ECE service providers, through legislation, to engage educators as employees and not contractors


  • Put conditions on Government funding to ensure subsidy funding is passed on to educators.  This may include requiring service providers to directly contract educators.

Home-based educators are a low-skilled workforce.  This means that they are unlikely to gain significant benefits from being self-employed contractors.  Improving the pay and the working conditions of those directly in contact with children is important for the quality of education and care.

The Ministry does not have enough information to understand the impact on service providers if they are required to employ educators.  For example, it may mean that educators must look after three of four ECE-aged children for this option to work.  This could mean educators who have two ECE-aged children of their own could no longer provide home-based ECE. 

What we would like from you

We would like to know what you think about working conditions for educators in home-based services.


What are the most important working conditions for you? (I.e.  pay, flexibility)

What are the benefits and downsides of your current working arrangements as an educator?

How would an employment, rather than contractual, relationship affect you?

Service Providers

How does your employment model currently work? Why do you opt for this employment model?

How would the proposed changes affect your service?


[7] OECD (2012) Starting Strong III – A Quality Tool Box for Early Childhood Education and Care.  Paris: OECD.