Salary Talk: New Bill Unlocks Pay Secrecy

Employers May Face Open Discussions on Employee Remuneration

Employees could soon feel empowered to openly discuss their paychecks, as a new bill aims to dismantle pay secrecy clauses. This legislative move could usher in an era of greater pay transparency, potentially addressing long-standing pay disparities.

Bill Passes Second Reading

Labour MP **Camilla Belich**’s Employment Relations (Employee Remuneration Disclosure) Amendment Bill has successfully passed its second reading. The bill, which garnered support from National and three opposition parties, seeks to nullify pay secrecy agreements that prevent staff from discussing their salaries.

The proposed legislation would prevent employers from taking legal action against employees who disclose their pay information to colleagues.

Experts Weigh In on Transparency

Employment experts suggest this shift could lead to more candid workplace conversations. University of Auckland law fellow **Simon Schofield** views the bill as a positive step towards equity.

“The underlying reason for the bill is to ensure that people who are discriminated against have the ability to see where they sit relative to other employees doing the same work and allows them to discuss that.”

—Simon Schofield, Professional Teaching Fellow, University of Auckland Law School

Schofield anticipates that some employers might find these discussions challenging but argues that employees should not face repercussions for seeking clarity on pay.

He added that encouraging pay discussions places the onus on employers to justify their pay decisions, which can sometimes be influenced by unconscious bias. This, in turn, could help address the gender pay gap.

Alison Maelzer, a partner at Hesketh Henry, acknowledged that remuneration can be a sensitive topic, making people hesitant to discuss it. She noted that such conversations can be awkward regardless of whether one is paid more or less than their peers.

Maelzer believes that if the bill becomes law, salary discussions might become more common around the office.

Meanwhile, Alastair Espie, a partner at Duncan Cotterill, noted that employees facing trouble over pay disclosure is infrequent. He suggested that employers often find it difficult to prove breaches of confidentiality regarding pay discussions.

Maelzer, with over two decades of experience as an employment lawyer, stated she has rarely encountered cases involving pay disclosure disputes. She speculated that employers might avoid disciplinary action to prevent unearthing underlying reasons for salary disparities.

Current employment agreements sometimes include confidentiality clauses that encompass employment terms. However, Maelzer clarified that the bill would not prohibit employers from including such clauses but would prevent them from acting against employees for disclosing remuneration details.

Schofield highlighted that employers have historically treated pay as confidential and have, in some instances, dismissed employees for breaching this confidentiality.

Globally, countries like Australia have also moved towards greater pay transparency. In 2023, Australia introduced legislation requiring employers with more than 100 staff to report on their gender pay gap, with companies also needing to advertise roles with salary ranges (Australian Government 2023).