A Labour Party Bill that would have ensured contractors are paid the minimum wage is facing defeat because United Future leader Peter Dunne has withdrawn his support for it.
Mr Dunne voted for the Bill on its first and second readings, which it passed by 61 votes to 60.
The Government and employer organisations oppose it.
Mr Dunne now says while the Bill's intention is sound, he doesn't think it's "the appropriate mechanism" to protect vulnerable contractors.
He says he's been talking to Workplace Relations Minister Michael Woodhouse, and has been given an undertaking that other "meaningful steps" will be taken to address problems contractors are facing.
Labour MP David Parker drafted the Bill.
He says people engaged as contractors have few of the protections given to employees under the Minimum Wage Act.
He uses pamphlet deliverers as an example, saying that when their work is broken down on an hourly basis they often earn less than the statutory $14.75 an hour.
Government MPs say the Bill is too prescriptive.
The Employers and Manufacturers Association, and BusinessNZ, say it would make many contracts unworkable.