Legislation passes amid concerns that it will cause workplace friction
Pay secrecy clauses in workplaces will be unenforceable, under a new bill that has passed Parliament.
The Employment Relations (Employee Remuneration Disclosure) Amendment Bill, pushed by Labour MP Camilla Belich, passed the third reading on Wednesday after getting support from the National Party, Te Pāti Māori, and the Green Party.
The bill aims to make pay secrecy clauses unenforceable and protect workers who discuss their pay from disciplinary action by employers.
"Proud that my bill allowing people to talk about their own pay has passed its third reading and will soon be law," Belich said on Facebook.
"Fairer and more transparent workplaces are good for everyone. Thanks to everyone who helped make this a reality."
Creating workplace problems
The third reading of the bill generated opposition from New Zealand First and the ACT Party.
New Zealand First MP Mark Patterson slammed the bill as an "abomination," warning about the "unintended consequences" stemming from the legislation.
"There are other reasons why you may have pay differentials between employees… It's performance, merit, experience—all those things come into it," he said.
He noted that while it may address the gender pay gap, there is also the possibility of workplace tensions arising from the legislation.
"There is the very real prospect that employers will just not want the grief of the tension that this might build up on their workplace as people are sharing their pay around their place of employment," he added.
ACT MP Parmjeet Parmar also said the party rejects the bill, saying that it will not do anything against pay discrimination and gender pay gap.
"What this is going to do is actually create more friction at workplaces when somebody will say no to disclosing their pay," Parmar said.
"Because now people will know there can't be a non-disclosure clause in their agreement, so they should disclose. And if they refuse to disclose, there will be friction at workplaces."
A 'small step forward'
Belich, in her speech during the third reading, said the bill is a small step in making New Zealand a "fair and equitable country."
"This is a small bill. It implements a small change that allows people to talk about their own pay, but it is a small step forward for New Zealand."
The Labour MP acknowledged that there is "more work to do" in addressing gender pay gaps, as well as ethnic and disability pay gaps.
"Backward steps for women, for Māori, for Pasifika are backward steps for all of us. Ignoring inequalities has never made them go away; it has just made them worse."
Ahead of the bill's passing, Sanam Ahmadzadeh Salmani, Employment Counsel at Employment Hero, already urged employers to review pay structures and look for discrepancies.
"Being proactive here will help you not only stay compliant, but to spot payroll red flags early," she said.
She also advised employers to be prepared to explain how pay is determined in the workplace.
"Employers need to be ready to explain how pay is determined and what data or criteria is used, how performance factors in, and how employees can progress. This builds trust and reduces confusion or resentment."
