How to prepare as remuneration disclosure bill nears final stage

Published 21 Jul 2025 | 2 min read

You’ve hired carefully, managed pay structures with discretion, and expected confidentiality clauses to do their job.

But now, long-standing assumptions around pay secrecy are being dismantled.

A Member’s Bill progressing through Parliament will soon make it unlawful to penalise employees for discussing their pay.

If you haven’t yet looked at your employment contracts or pay practices, now is the time.

The change already in motion

The Employment Relations (Employee Remuneration Disclosure) Amendment Bill, introduced by Labour MP Camilla Belich, recently passed its second reading in Parliament.

National voted in support, signalling strong cross-party backing.

The Bill now moves to the Committee of the Whole House.

If passed, it will limit an employer’s ability to enforce pay secrecy clauses and expand employee protection under the Employment Relations Act 2000.

What does this mean in practical terms?

If an employee talks about their own pay, asks someone else about theirs, or receives an inquiry from a colleague, they will be protected.

Employers will no longer be allowed to discipline, pressure, or penalise staff for these conversations, even if contracts attempt to prevent them.

The Bill adds a new form of personal grievance: adverse conduct for a remuneration disclosure reason.

That includes dismissals, demotions, or exclusion from workplace opportunities because of pay discussion.

Why this matters for NZ employers

Many businesses have included pay confidentiality clauses to reduce tension or protect negotiating leverage. Under the proposed law, those clauses can still appear in contracts.

But they will be unenforceable in practice.

Employers will not be able to take action when an employee breaches them.

This means your business must be ready to justify pay differences, explain pay progression, and demonstrate fairness in how salaries are set.

The Bill does not require employees to disclose their pay. Discussions are entirely voluntary.

But once the law changes, conversations that once took place in whispers may come out into the open.

A casual question about pay at Friday drinks could suddenly lead to formal discussions around equity and consistency.

The risks are real

Select committee submissions revealed how hidden pay gaps often go unnoticed until someone speaks up.

There were multiple stories of employees discovering large pay differences between people doing the same job. Some of these gaps were linked to gender or ethnicity, while others were harder to explain.

In some workplaces, secrecy is not protecting morale - it's hiding problems.

Employers who take adverse action in response to these conversations will face real legal exposure.

The legislation introduces a presumption: if an employee suffers negative consequences after a pay discussion, the employer must prove the reason was unrelated.

This flips the burden and creates more risk for employers relying on informal management responses.

Get ahead of the change

If passed, this law will push every New Zealand business toward greater transparency. While some employers may be concerned about friction, others are already using pay visibility to strengthen trust and drive better retention.

The challenge now is to make sure your business is ready.

• Start by reviewing your employment agreements.
• Remove or revise pay secrecy clauses that may no longer hold weight.
• Assess your remuneration practices and prepare to explain the logic behind pay decisions.
• Equip your managers to handle conversations that may be awkward, but legally protected.

This Bill is a nudge toward accountability. Businesses that ignore it may face complaints and reputational damage. Those that embrace it have a chance to lead with confidence and prove their pay practices are sound.

Use Employment New Zealand’s official resources to ensure your processes are fully up to date.

Or get an HR expert to ensure your employment contracts or pay practices are up-to-date with new NZ legislation.

More information on our HR consulting services