New Law Makes Pay Secrecy Clauses Unenforceable

Protection for remuneration disclosure

Under the new law, employees are expressly protected when they:

• • Discuss their remuneration with others (whether or not they reveal the actual amount);
  • Inquire about another person’s remuneration;
  • Participate in discussions with others about remuneration; or
  • Receive an inquiry from another person about remuneration.

Employers cannot penalise or take legal action against employees for these activities. However, it is worth noting that the law does not compel employees to disclose their pay if they prefer not to.

The amendment also introduced “adverse conduct for a remuneration disclosure reason” as a new ground for a personal grievance under Section 103 of the Employment Relations Act.

“Adverse conduct” in this context may include:

• Dismissing an employee;
• Refusing or omitting to afford the employee the same terms, conditions, benefits or opportunities as others in substantially similar circumstances;
• Subjecting the employee to any detriment that comparable employees would not be subjected to; or
• Retiring the employee or requiring or causing them to retire or resign.

To succeed in such a claim, the employee must show that a remuneration disclosure reason was a substantial reason for the employer’s actions. Once this is established, the employer carries the burden of proving otherwise.

Other confidentiality obligations (such as those relating to trade secrets or commercially sensitive information) remain enforceable, provided they do not conflict with the new legal protections for remuneration disclosure.

With the amendment now in force, existing pay secrecy clauses or any provisions that limit discussions about remuneration (including certain confidentiality clauses) are no longer enforceable to the extent that they restrict remuneration discussions.

Although these clauses remain valid on paper, employers cannot rely on them to discipline or penalise staff. Confidentiality provisions that do not relate to remuneration may still apply, but they cannot be used to override the protections now guaranteed under the amendment.

For employers

Employers should review and update employment agreements and internal policies to ensure compliance. Any confidentiality provisions that remain should be worded carefully to avoid conflict with the new protections. It is also important to train managers and other staff, so they understand employees’ rights and do not inadvertently breach the law.

For employees

Employees should be aware of both their rights and their limits. You may now discuss or ask about pay without fear of retaliation, but you are not obliged to disclose your own pay if you do not wish to. These protections apply only to conduct occurring on or after 27 August 2025. If you believe your rights have been infringed, it is advisable to seek employment law advice promptly.

This statutory change represents a shift in how remuneration and pay equity are addressed in New Zealand workplaces. Advanced through a member’s bill, it is described as a small step toward greater transparency and equality. By enabling open discussion about pay, the law aims to reduce inequities and foster fairer workplace practices.

Please note that the above is for general information only and does not constitute legal advice. You may also wish to visit the Government’s page for more information about the amendment to the Employment Relations Act.

 And if you need specific advice or wish to discuss your circumstances, feel free to talk to one of our lawyers and specialists at info@adventark.co.nz or 09 969 1493.