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29/08/2025·2 min read
A new era of pay transparency
The Employment Relations (Employee Remuneration Disclosure) Amendment Act 2025 (Amendment Act) came into force on 27 August 2025. The Amendment Act starts a new era of pay transparency in Aotearoa New Zealand, aligning us with comparable jurisdictions.
What is changing?
Employees can now choose to talk freely about their pay with other employees, enquire into another employee’s pay and participate in conversations or respond to inquiries about pay (regardless of whether their pay is disclosed), without fear of their employer engaging in ‘adverse conduct’ towards them in response. By contrast, in the United Kingdom, disclosure is only allowed where the purpose is to find out whether there is a connection between any difference in pay and a protected characteristic.[1]
Adverse conduct includes dismissing an employee, refusing or omitting to offer the same terms, conditions, benefits, or opportunities as others with similar skills and experience, or subjecting an employee to disadvantages that their peers in comparable roles do not face. It also covers situations where an employee is forced, required or caused, to retire or resign.
This applies to any adverse conduct an employer takes from 27 August 2025, even if the employee discussed their pay before that date.
New personal grievance ground
A new personal grievance ground has been added under section 103 of the Employment Relations Act 2000 (Act), marking a relatively rare legislative development. The last additions to personal grievance grounds occurred in 2022 and 2016, highlighting the significance of this change.
If an employee faces ‘adverse conduct’ for discussing or disclosing their pay, they can bring a personal grievance claim.
To establish such a claim, a two-limb test must be satisfied:
- the employee must prove that adverse conduct occurred; and
- the employee’s remuneration disclosure must be a substantial factor in the employer’s adverse conduct. Importantly, there is a reverse onus: it is presumed that the remuneration disclosure was a substantial factor for the employer’s adverse conduct, unless the employer can prove otherwise on the balance of probabilities.
What should employers be thinking about?
If an employer has any employment documentation with payment confidentiality requirements, these will no longer be enforceable. While employers do not need to proactively update existing employment agreements, they can no longer rely on pay secrecy clauses. Going forward, employers should not include such clauses in new employment agreements to avoid inadvertently relying on them and because doing so would be inconsistent with the Act.
Get in touch
Please feel free to reach out to any of our experts if you have any questions about how the Amendment Act affects your organisation.
Special thanks to Caitlin Walker for her assistance in writing this article.
[1] Equality Act 2010 (UK), c 3, s 77. Protected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
