Conversations about what employees earn are no longer prohibited or required to be shrouded in secrecy. The Employment Relations (Employee Remuneration Disclosure) Amendment Bill came into force on 27 August 2025 (Amendment Act) and amends the Employment Relations Act 2000 (Act), making it unlawful for employers to take adverse action against an employee who discloses their pay to others.
What was the status quo?
Until recently, employers in New Zealand could require an employee to keep their pay confidential, and a clause to this effect may have been recorded in the employment agreement or policy. An employer may have taken disciplinary action against an employee who breached a requirement for confidentiality.
Why the change?
The stated intention in the Amendment Act was to “ensure that employees can voluntarily discuss and disclose their own pay rate to others without detrimental repercussions to their employment”. The hope is that the amendments will encourage pay transparency and assist with identification and remedying of pay discrimination.
What does the Amendment Act change?
The Amendment Act inserts a new personal grievance ground under section 103 of the Act for “adverse conduct for a remuneration disclosure reason”.
Adverse conduct includes dismissing an employee, refusing or omitting to afford one employee the same terms, conditions and/or benefits as other employees, subjecting an employee to detriment, or retiring an employee or requiring or causing them to retire or resign.
A remuneration disclosure reason includes where an employee discusses their remuneration with another person (whether or not this discloses the actual remuneration), inquiring into the remuneration of another employee, participating in a discussion with an employee about remuneration, or receiving an inquiry about their remuneration.
An employer is only deemed to have engaged in adverse conduct for a remuneration disclosure reason if the remuneration disclosure reason was a “substantial” reason for the employer’s adverse conduct. The onus is on the employer to prove, on the balance of probabilities, that the remuneration disclosure was not the substantial reason for the adverse conduct.
In the Amendment Act, “detriment” includes “anything that has a detrimental effect on the employee’s employment, job performance, or job satisfaction”.
“Remuneration” includes:
- “salary or wages (including payment for overtime and penal rates);
- allowances;
- productivity-based, bonus, or incentive payments (including commission);
- any employer contribution to a superannuation scheme for the benefit of the employee;
- any other type of payment for work; but
- does not include any payment or other benefit received by the employee as an owner of the business”.
It should be noted that the Amendment Act does not impose any obligation on employees to share their remuneration details – they are entitled to decline another employee’s invitation to discuss, and any improper pressure to talk might result in the employer needing to address this.
What now?
The Amendment Act only applies to an employer’s conduct on or after 27 August 2025 (the Commencement Date).
Employment agreements entered into before the Commencement Date that contain pay secrecy or confidentiality clauses do not need to be varied or amended, but the clauses will now be of no effect.
However, we recommend employers review their employment agreement templates to ensure that they do not contain pay secrecy or confidentiality clauses for any new employees from the Commencement Date. Some employment agreements may not explicitly state, “you cannot discuss your remuneration with any third party” but rather have a broader term which requires employees to keep their terms of employment confidential. Any clauses of this nature should now carve out the right for employees to discuss their remuneration.
If you need your employment agreement template reviewed, or have any questions about the new law, please reach out to the Employment Law Team or your usual contact at Hesketh Henry for advice.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
