Secrecy is Out: What the New Pay Transparency Law Means for Employers and Employees
Running a business in New Zealand is tricky.
It means keeping up with an ever-changing landscape of employment law; from 90-day trials to personal grievance extensions, changing visa sponsorship requirements, the Holidays Act (we could go on!), it can sometimes feel like just when you’ve got your head around one piece of legislation, another update comes along.
The latest change? A significant shift in how we handle remuneration conversations in the workplace. As of 27 August 2025, the Employment Relations (Employee Remuneration Disclosure) Amendment Act is in force, and with it, pay secrecy clauses are officially a thing of the past.
This change has big implications for both employees and employers, especially in small and medium businesses where team dynamics and trust are so central to success. Let’s unpack what’s changed, what it means in practice, and how you can set your business up to thrive under this new legislation.
What’s Changed?
Up until now, it’s been common for employment agreements to include clauses that restrict employees from talking about their pay. You might see this written as a confidentiality clause or as part of broader “terms of employment” secrecy.
The new law has made those clauses unenforceable. That means:
Employees can now discuss their own remuneration openly, if they choose.
They can ask about the pay of others.
They can take part in conversations about remuneration without fear of repercussions.
Just as importantly, the law introduces protections. Employers cannot take adverse action (such as disciplinary steps, dismissal, or even subtle forms of retaliation) against employees who exercise this right.
What hasn’t changed? Employees are not required to share their pay if they don’t want to. And businesses are not required to publish pay rates or make them public unless, of course, you choose to take a transparency approach, but this is completely left up to you.
Why Has this Change Come About?
Pay secrecy has long been criticised for helping inequities fly under the radar. If employees can’t compare, it’s very hard to know if a pay gap exists.
By removing the ability to enforce secrecy, this legislation change aims to:
Shine a light on inequities that may otherwise go unnoticed.
Empower employees to advocate for themselves.
Build trust in workplaces by normalising open and honest dialogue around pay.
For many business owners, this might sound daunting. But handled well, this shift can actually strengthen your workplace culture and employer brand.
What this Means for Employees
For employees, this change is about choice.
They now have the right to:
Talk about their own pay with colleagues, whānau, or even external networks.
Ask about someone else’s pay (though the other person isn’t obliged to answer, of course).
Engage in discussions about pay without being penalised.
This is particularly powerful in workplaces where people may have suspected pay differences but had no safe way to raise or confirm them.
For many employees, just knowing they have the protection of law will reduce fear of retaliation and encourage greater confidence when negotiating or raising concerns.
What this Means for Employers
While the law doesn’t require you to disclose pay rates, it does require you to:
Stop enforcing secrecy clauses
If your current employment agreements contain clauses restricting remuneration discussions, those clauses are now void. You don’t need to re-contract existing staff, but you should update your templates going forward.Avoid adverse action
Any hint of punishing or sidelining someone for talking about pay could expose you to a personal grievance claim. That includes subtle forms of retaliation, like excluding someone from opportunities or performance reviews.You should review your policies
Broader confidentiality policies may unintentionally restrict remuneration conversations. Check the wording carefully and update where needed.Communicate the change
Proactively telling your team about this shift can go a long way to preventing confusion or mistrust.
What can Happen if You Get it Wrong?
The biggest risk for employers is personal grievance claims. If an employee believes they’ve suffered disadvantage because they discussed pay, they are now fully within their right to take legal action.
There’s also the cultural risk. If staff feel they aren’t being paid fairly and the conversations start happening without you being ready, you may find yourself on the back foot. Pay transparency laws often expose issues that were already there, the legislation just accelerates the spotlight.
Turning Risk Into Opportunity
While the law might feel like a compliance headache, it can also be a catalyst for positive change. Here’s how to make the most of it:
1. Audit Your Pay Practices
Use this moment to review your current pay structures. Are there unexplained differences in pay across gender, tenure, or role type? If so, now’s the time to address them.
2. Equip Your Leaders
Managers are often the first to field tricky questions. Training them on how to respond confidently and empathetically to pay conversations will help avoid knee-jerk reactions that could land you in trouble.
3. Build Transparency Into Your Culture
You don’t have to publish everyone’s salary tomorrow, but you can move towards greater openness by:
Defining clear pay bands for roles.
Explaining how progression works.
Sharing the criteria behind pay decisions.
This kind of transparency not only mitigates risk but also improves trust and retention.
4. Update Your Employment Agreements and Policies
Remove any secrecy clauses from templates and check your confidentiality wording. Make sure your handbook or policies reflect the new reality.
5. Communicate, Communicate, Communicate
Don’t leave employees to figure it out themselves. A clear message from leadership that acknowledges the law change, explains what it means, and reaffirms your commitment to fair pay will go a long way.
How Core HR Can Help
We know these kinds of changes can feel overwhelming, especially when you’re already juggling operations, clients, and the hundred other hats you wear as a business owner.
We support SMEs across New Zealand with:
Contract and policy reviews to make sure your documents are compliant and fit for purpose.
Pay equity and remuneration audits to identify and resolve any risks before they become grievances.
Manager training so your leaders feel confident responding to questions about pay.
Communication strategies to roll out changes in a way that builds trust, not tension.
HR doesn’t need to be hard! Let us prove it.