Employers are now prevented from taking disciplinary action against employees who talk about their pay.
The Employment Relations (Employee Remuneration Disclosure) Amendment Act, which came into force on 27 August 2025, amends the Employment Relations Act 2000 to make it unlawful for employers to take adverse action against an employee for disclosing their remuneration.
Status quo
Until now, it’s been perfectly legal for employers to include pay secrecy clauses in employment agreements or workplace policies. These clauses could restrict employees from discussing their remuneration with others, and non-compliance could lead to disciplinary action. While intended to protect business interests, such clauses also had the effect of limiting transparency around pay equity.
Legislative history and international context
The move toward reform began in June 2022, when Parliament’s Education and Workforce Committee recommended that the Government consider restricting pay secrecy in employment agreements. The Committee raised concerns that secrecy could contribute to pay inequities, especially across gender and ethnic lines.
By then, New Zealand was already behind. Australia banned pay secrecy in 2022, and similar laws already existed in the UK and several US states. Reform here was always a matter of when – not if.
New ground for personal grievance
The Amendment Act introduces a new personal grievance ground under section 103 of the Employment Relations Act 2000: ‘Adverse conduct for a remuneration disclosure reason.’
Remuneration is defined to include:
- 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.
The Amendment Act provides that a remuneration disclosure occurs where an employee:
- discusses their own pay
- enquires about others’ pay
- participates in pay-related discussions
- responds to questions about their remuneration.
Adverse conduct includes:
- dismissal
- unequal treatment in terms or benefits
- forced resignation or retirement
- any other form of detriment.
Crucially, if a personal grievance is raised by an employee under this new ground, the employer has the burden of providing that the remuneration disclosure was not a substantial reason behind their actions. In practical terms, this would require the employer to point to another reason as the substantial (or main) reason for the adverse conduct, such as poor performance, or a disciplinary issue entirely unrelated to the remuneration disclosure.
Next steps
The Amendment Act applies to conduct from 27 August 2025 onwards. This means that existing ‘pay secrecy’ clauses in employment agreements are unenforceable.
We recommend that employers should now:
- audit employment agreements and remove ‘pay secrecy’ clauses
- update confidentiality clauses to make sure they don’t cover pay.
If you’d like advice on how this law affects your business, or if it’s time to refresh your employment agreements, get in touch with Lane Neave’s Employment team.
