Member’s Bill to prohibit pay secrecy clauses in New Zealand

  • Legal update

    28 March 2024

Member’s Bill to prohibit pay secrecy clauses in New Zealand  Desktop Image Member’s Bill to prohibit pay secrecy clauses in New Zealand  Mobile Image

Labour MP, Camilla Belich, had her Member’s Bill, the Employment Relations (Employee Remuneration Disclosure) Amendment Bill, introduced in Parliament on 20 March 2024 and seeks to amend the Employment Relations Act 2000 to protect employees who discuss or disclose their remuneration to third parties. More broadly, the Bill also seeks to create greater transparency in pay and to enable any pay discrimination to be more easily identified and remedied. 

As the law stands, it is lawful for employers to include pay secrecy clauses in employment agreements (although pay secrecy is usually enforced through confidentiality clauses and convention as opposed to an express clause). Failure to keep pay confidential can result in disciplinary action against employees. The Bill would enable employees to bring a personal grievance claim against their employer if they are subjected to adverse conduct for a ‘remuneration disclosure reason’. In other words, the Bill would render pay secrecy clauses unenforceable and the use of such clauses could expose employers to legal liability. The Bill would align New Zealand with the laws in the UK, Canada, Australia, and some US states.

The Bill will likely have its first reading in the next few weeks but it is unclear if, or when, the Bill may become law. If your organisation currently uses pay secrecy clauses in employment agreements, there may be merit in planning ahead and considering what documents and/or systems may need to change should this Bill proceed.

If you would like further information about the proposed Bill, please do not hesitate to contact one of our employment experts.