Employment Relations (Employee Remuneration Disclosure) Amendment Act: what employers need to know

The Employment Relations (Employee Remuneration Disclosure) Amendment Act has recently passed into law in New Zealand, significantly changing how salary and pay information can be treated in employment agreements.

What the new law means

The amendment makes it unlawful for employers to treat an employee’s remuneration as confidential in a way that prevents employees from discussing it. Specifically:

• Employees now have the legal right to disclose or discuss their pay.
• Any contractual clauses that restrict or prohibit such discussions (often referred to as pay secrecy clauses) are unenforceable.
• Employers can’t take adverse action – such as dismissal, demotion, unfair treatment, or forcing resignation, against an employee for disclosing or discussing their remuneration.

This change is designed to promote pay transparency and reduce pay inequities in the workplace.

When does it take effect?

From 27th August 2025 onwards, pay secrecy clauses have no effect, and employees are protected from any negative consequences for discussing their pay.

What about breaches before 27 August 2025?

A common question is whether employees who disclosed remuneration prior to the law change are protected. The answer is nuanced:

• Before 27 August 2025: Pay secrecy clauses were enforceable. If an employee disclosed pay information in breach of such a clause, this could have been considered misconduct under their employment agreement at the time.
• After 27 August 2025: These clauses are unenforceable, and employees are fully protected when discussing their pay.

Importantly, the law is not retrospective. This means that disclosures made before the law took effect aren’t automatically excused. However, employers would face practical and legal risks if they attempted to discipline employees after 27 August for conduct that is now protected. Employment Relations Authority (ERA) or court scrutiny would likely consider whether such action is consistent with the current law and with an employer’s duty of good faith.

What steps do employers need to make?

• Review existing employment agreements and policies. Pay secrecy clauses are no longer enforceable and should be removed from new agreements.
• Avoid taking action against employees for disclosing pay, even if a disclosure occurred before 26 August 2025. Doing so may undermine good faith obligations and expose the business to challenge.
• Encourage open, transparent communication around remuneration to align with the law’s purpose of promoting fairness and equity.

This new law is now enforceable

From 27 August 2025, salary and pay information can no longer be deemed confidential in employment agreements. While breaches of confidentiality before this date technically occurred under the old rules, taking action against employees now for past disclosures carries significant risk and may not withstand legal scrutiny. The safest path forward for employers is to update agreements and practices to reflect the new era of pay transparency.

Need advice?
Clients of Citation HR can reach out to us on the 24/7 HR Advice Line. If you’re not a client but have concerns, we’re offering a complimentary call to discuss how we can help you tackle this change. Book your call here.