New Pay Transparency Law in New Zealand: What Employers Need to Know
What's Changed in New Zealand Employment Law?
The Employment Relations (Employee Remuneration Disclosure) Amendment Bill gained royal assent on 26 August 2025, making an amendment to the Employment Relations Act 2000.
This amendment makes it law that employees can now discuss their salaries and wages without fear of employer retaliation.
This significant change to New Zealand employment law means that employers are prohibited from taking adverse action against employees who disclose or discuss their remuneration with others.
New Personal Grievance Ground
The law creates a new ground for a personal grievance if an employer engages in “adverse conduct for a remuneration disclosure reason".
As employment law specialists, we've seen how personal grievance claims can impact businesses, making it crucial that employers adjust to this law change.
What Constitutes "Adverse Conduct"
Adverse conduct includes an employer dismissing an employee, providing them with different terms of employment, or any other detrimental treatment, for a remuneration disclosure reason.
What is a “Remuneration Disclosure Reason?”
An employer will be taking an action for a “remuneration disclosure reason”, if a substantial reason for their action is for an employee:
Discussing their pay;
Asking about another employee’s pay;
Participating in a discussion about another employee’s pay; or
Receiving an inquiry about their pay from another employee.
Impact on Employment Agreements
Pay Secrecy Clauses
Some employment agreements will currently contain clauses (often in confidentiality provisions) that seek to prevent employees from discussing their remuneration with others. This law change does not mean that an employer must have its employees all sign new employment agreements. However, it does mean that:
These pay secrecy clauses in employment agreements are not enforceable.
Employers could face proceedings in the Employment Relations Authority for taking action against employees in reliance on a pay secrecy clause.
Why This Employment Law Change?
Addressing Pay Discrimination in New Zealand
The law change brings New Zealand into line with a number of other countries (such as Australia, the UK, and Canada) that have similar laws, in the hopes it will prevent pay secrecy from leading to discriminatory outcomes, especially for women.
Individual-Level Remedy
The law change aims to make it easier to identify and remedy pay discrimination on an individual employee level, by protecting employees who choose to discuss or disclose their earnings to others.
Practical Steps for Employers
Review Your Employment Documents
Review employment agreements - to identify any pay confidentiality clauses.
Review disciplinary procedures - to ensure they do not penalise pay discussions.
Train management - Educate supervisors or managers of staff about the employment law changes, to prevent inadvertent breaches.
Review policies - Update any policies that seek to restrict pay discussions.
Risk Management
Avoid any disciplinary action related to pay discussions.
Document legitimate performance or conduct issues separately from pay-related conversations.
Ensure consistent application of employment policies regardless of pay disclosure activities
Employment law advice from specialists can help ensure your policies comply with current legislation.
Consider Proactive Measures
While not mandatory, consider:
Regular pay equity reviews.
Transparent remuneration frameworks.
Clear communication about how pay decisions are made.
What This Doesn't Mean for New Zealand Employers
It's important to note that there has been no indication New Zealand will follow other countries, such as Australia, in introducing mandatory remuneration reporting. Rather, this new employment law is focused on protecting individual employee rights rather than requiring systematic pay transparency.
Getting It Right: Employment Law Compliance
The new law represents a significant shift in employment relations. While employees now have stronger protections to discuss their pay, employers still maintain their rights to:
Set remuneration levels based on legitimate business factors
Maintain confidentiality around sensitive business information
Manage performance and conduct issues through proper processes
The key is ensuring that any employment actions are genuinely unrelated to pay discussions and can be clearly justified on other grounds.
Need Employment Law Advice?
Employment law is complex, and this change adds another layer to consider in your workplace policies and practices. If you're unsure about how this new employment law affects your business or need assistance reviewing your employment agreements and policies, McLuskie Dalziel Lawyers - employment specialists located in Hamilton - can help ensure you're compliant and protected.
Our employment law team provides expert advice on all aspects of New Zealand employment law, from employment agreements to representation in the Employment Relations Authority or Employment Court.
Contact McLuskie Dalziel Lawyers today for specialist employment law advice tailored to your business needs.
This article is for general information purposes only and does not constitute legal advice. For advice specific to your situation, please contact McLuskie Dalziel Lawyers, employment law specialists located in Hamilton, New Zealand.
