Proposed bill aims to let employees share their pay rate without employment sanctions
Employers may soon be prevented from taking disciplinary action against employees who talk about their remuneration in a new Bill that aims to promote pay transparency.
The Employment Relations (Employer Remuneration Disclosure) Amendment Bill would enable employees to discuss and disclose their own pay rate to others without detrimental effects on their employment.
Currently, employers can include clauses in individual and collective employment agreements that prohibit employees from discussing or disclosing their remuneration to third parties, including colleagues.
Various overseas jurisdictions, including the United Kingdom, Canada, Sweden, Finland, and Denmark, have laws against pay secrecy clauses. The European Union is also introducing various pay transparency measures aimed at closing the gender pay gap, which include making it compulsory for employers to inform job seekers about starting salaries or the pay range of advertised positions.
New Zealand’s proposed law does not go as far as this, although the Explanatory Note to the Bill states it is hoped the Bill leads to “greater transparency in pay and allow any pay discrimination to be more easily identified and remedied.”
The Bill passed its first reading in November 2024 with Labour, National, the Greens, and the Māori Party voting for it, and with New Zealand First and ACT voting against it.
Minister for Workplace Relations, Brooke van Velden, has stated that ACT does not support the Bill because there is a risk it might create “tension” within the workplace.
The Bill went to the Education and Workforce select committee, which reported back on it on 20 May 2025, with a second Parliamentary reading likely to occur soon.
If the Bill becomes law, there may certainly be some interesting consequences. We wonder whether it might result in an increased number of discrimination claims, with pay disparity providing an evidential basis to support such claims. In addition, some critics have raised concerns about pay information being used amongst businesses to gain a competitive advantage.
Stella Smith is a law clerk in the Employment Team at Lane Neave in Christchurch. Gwen Drewitt is a Special Counsel in the Employment Team at Lane Neave in Christchurch. Fiona McMillan is a Partner in the Employment Law Team at Lane Neave in Auckland. Andrew Shaw is the Managing Partner of Lane Neave and Head of the Employment Law Team in Christchurch. Andy Bell is a Partner specialising in employment law and relationship property at Lane Neave in Wellington.
