The Council of Trade Unions warns many forestry workers may not have accident cover.
Union ACC lawyer Hazel Armstrong said some employers were getting out of paying their ACC levies by treating their workers as independent contractors.
She told Parliament's Transport and Industrial Relations Committee hearing submisisons on proposed ACC law changes that she believed the practice was widespread.
"They say to the worker, 'You're self employed, you're a contractor, you pay the levy,' but the worker has no idea how to go about paying the levy.
"They don't even know that in fact they're self employed - all they know is they're turning up to work, so there's one huge issue around the nature of work, the nature of the employment relationship, and how the employer shifts the levy responsibility to the worker.
"Now, ACC doesn't care, because they then don't have to pay if the person is injured, because no one's paid a levy on their behalf."
Ms Armstrong said a comparison between how many people were on the ground in forestry and how many levies were actually paid would indicate the size of the issue.