There are doubts about the effectiveness of the government's plan to improve contractors' rights.

There have been increasing reports of vulnerable contractors working long hours, earning less than minimum wage, and having no power to negotiate better arrangements.

One of the government's options is to extend the rights of some contractors so they can bargain collectively about their terms of employment.

But Business New Zealand chief executive Kirk Hope told Mike Hosking collective bargaining wouldn't suit people in the gig economy.

"They've already looked at a little bit with the Hobbit Law and it didn't work that well, and I think that's quite a challenging area they will have to deal with if they want to go down that path."

He says only few contractors who are negatively affected, so the rules don't need to be changed entirely.

"We'd say really look at the labour inspectorate and target some of their activities to ensure those baddies can be identified and action can be taken."