Pay Secrecy Clauses Are No Longer Enforceable in New Zealand
Pay secrecy clauses, which prevent employees from discussing or revealing their salary, wages, bonuses and other financial benefits, have previously been enforceable in New Zealand. These clauses, which were commonly included in employment agreements, allowed an employer to, for example, take disciplinary action if an employee told another employee what their hourly wage was.
From 26 August 2025, these clauses are no longer enforceable. The Employment Relations Act 2000 (the Act) now provides protection for employees who discuss, disclose or enquire about their or other employees’ remuneration.
In a nutshell, the simple objective of the Act is to allow employees to talk about their own pay if they want to, making it safe for employees to share their own information with colleagues and with family.
How are employees protected?
The Act now includes a new ground for a personal grievance. This ground arises where the employer engages in adverse conduct in respect of an employee, because the employee disclosed their pay or remuneration. This includes where an employee enquired about, or discussed, another employee’s pay.
Examples of adverse conduct would include the employer disciplining or terminating an employee, forcing them to retire or resign or deliberately providing them with less favourable terms of employment if they discuss renumeration.
To successfully raise a personal grievance, employees must demonstrate that:
• Adverse conduct occurred; and
• That a ‘remuneration disclosure reason’ was a significant reason for the employer’s adverse conduct.
This means showing that the employer took the adverse action because an employee discussed their remuneration with any other person. It even covers the situation where an employee discussed their pay but did not actually say the amount they are earning and where the employee had discussions with people outside the workplace.
What is ‘remuneration’?
“Remuneration” in this context includes the following:
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.
Any payment made to an employee as an owner of the business is excluded from the term “remuneration”.
What do I do if I have a pay secrecy clause in my current staff agreements?
Understand that, from 26 August 2025, these clauses cannot be enforced by employers. Any adverse action taken against an employee for breach of such a clause would be considered unlawful. The same would apply to any other mechanism, such as a policy or management instruction, aimed at achieving pay secrecy.
While you’re not obligated to formally vary these existing agreements, you need to recognise the clause has been rendered unenforceable, and best practise would be to promptly remove them from agreements moving forward.
Business impact
Some employers are concerned that the ban on pay secrecy will create tension in the workplace when employees are free to compare their pay and benefits, without understanding the context and reasons for these differences.
Provided that the pay discrepancies are not based on a prohibited ground of discrimination (such as gender or race), the employer and employee are free to negotiate their employees pay, which can be based on many factors such as market conditions, employee experience, skills and qualifications.
Can an employee refuse to discuss their remuneration with others?
If asked, an employee can still refuse to discuss their pay and keep it confidential if they so choose. The Act makes it clear that an employee’s pay is their own business and it's their decision if they want to share it with others.
Employer’s duty of confidentiality not affected
The employer retains their duty of confidentiality with regard to employee information and should not disclose an employee’s pay to others.
As a leading workplace relations specialist, Peninsula can assist with any queries you may have surrounding employment agreements and pay secrecy. Contact us today.
