New Zealand businesses urged to prepare for pay secrecy law
The bill seeks to prohibit employers from including pay secrecy clauses in employment contracts, which currently prevent staff from discussing their remuneration. Should it pass into law, employees would be free to speak openly about their pay without risk of adverse consequences from their employer. The National Party has indicated ongoing support for the legislation, increasing expectations that it will be enacted.
Pay transparency push
According to Sanam Ahmadzadeh Salmani, Employment Counsel at Employment Hero and workplace law commentator, the proposed law focuses on greater pay transparency and addressing wage gaps. "The legislation is designed to promote greater pay transparency and equality, helping to identify and address unjustified pay disparities. While it's a welcome change that will bring New Zealand in line with countries that have implemented similar measures, such as Australia and the UK, employers should take proactive steps now to prepare for if the Bill passes," said Sanam Ahmadzadeh Salmani.
The objective of the bill is to create an environment where employees can more readily compare pay, understand the criteria used to set remuneration, and highlight unexplained pay differences.
Advice for employers
Employment Hero has advised that employers can benefit from acting ahead of the legislative changes by revising their internal practices. Ahmadzadeh Salmani elaborated on the potential benefits and necessity of pre-emptive measures. "This is an opportunity for employers to drive better pay transparency and better outcomes for both businesses and employees. Aligning with the legislation will not only ensure compliance if and when required but can also improve employee satisfaction and retention. Employees want to know they're being treated fairly and businesses that embrace this change will likely see stronger engagement and loyalty. "By preparing and making any changes before the Bill passes, employers will be on the front foot and can avoid being caught out later down the track," added Ahmadzadeh Salmani.
Ahmadzadeh Salmani outlined three key steps that employers should take now: conduct a pay review, review employment contracts, and draft clear explanations of pay determination.
Pay review
Addressing the first recommendation, Ahmadzadeh Salmani said: "Start by reviewing your current pay structures – look for any discrepancies and understand the reasons behind them – whether it's due to role differences, experience or something else. Being proactive here will help you not only stay compliant, but to spot payroll red flags early," advises Ahmadzadeh Salmani.
Contract reviews
The second step involves revisiting the language used in existing employment agreements: "Employers should also review employment agreements for any clauses that restrict pay discussions. These might not be labelled as 'pay secrecy' and they could be buried under general confidentiality or remuneration clauses. Having a clear plan of what needs updating now puts you in a better legal position once the Bill is passed," adds Ahmadzadeh Salmani.
Clear communications
The third recommendation is to improve pay-related communications with staff: "Transparency doesn't stop at removing secrecy clauses. 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," she adds.
The Employment Relations (Employee Remuneration Disclosure) Amendment Bill, if enacted, would bring New Zealand into greater alignment with jurisdictions such as Australia and the United Kingdom, both of which have implemented measures relating to salary transparency in employment contracts.
Employment Hero has made free resources available to businesses in New Zealand to assist in understanding employment law updates related to pay transparency and compliance requirements.
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Explainer - The public likes to have their say. Tens of thousands of public submissions come in every year to bills before Parliament and to local government entities. With large-scale campaigns and website submission forms, the ability to speak out is easier than ever - but that's causing a problem on the other end of the system, where planners and politicians can struggle to keep up. Artificial intelligence has increasingly been drafted to go over public submissions. Some have applauded the technology's ability to process data quicker than humans, while others fear the human touch may be getting lost in the shuffle. What exactly does AI processing of public submissions mean, how does it work, and are everyone's views getting a fair shake in the process? Here's a breakdown of it all. First, how do public submissions work? It's a chance for people to get their voice heard in local and national government. People can make submissions to both their local councils and to Parliament. Submissions can be made to local councils on things like planning and urban development, while the public can make submissions to Parliament select committees on upcoming bills. Submissions have been sky-high in recent months, where the Treaty Principles Bill received more than 300,000 submissions, while the Regulatory Standards Bill which is now before Parliament also has had huge interest. Final submission numbers on that have not been released, but even the early discussion on the proposed bill at the end of last year received about 23,000 submissions. Dr David Wilson, Clerk of the House of Representatives who oversees the business of Parliament's rules and procedures, said public input is at a high. "The Treaty Principles Bill had more submissions than the last two parliaments combined," he said. At one point submission numbers were so large the website suffered technical difficulties. Wilson said the number of submissions does put a strain on resources in Parliament. "If that is the sorts of volumes we're going to see on more and more bills, the days of human beings being able to deal with them in a sort of reasonable time will be past." When submissions come to Parliament, staff of the Office of the Clerk first process them to make sure they are relevant to the bill and not defamatory or insulting before they go on to select committees. Select committees then process and consider feedback before making possible changes to a bill ahead of a final vote on it. "It's great that the public want to engage with Parliament and see the value in making their thoughts known even in such volumes," Wilson said. "I think people understand that no individual MP could read 300,000 submissions. We can't create more time for MPs to read them." Eddie Clark, a senior lecturer in public law at Victoria University of Wellington who is critical of AI use in public submissions, noted that large numbers of submissions have been processed before AI became widely available, such as the Conversion Practices Prohibition Legislation Bill in 2021 which received more than 100,000 entries. "So it is possible for very large numbers of submissions to be actually read and processed by actual human staff. What was required was time and resource, and in my opinion the denial of both is a reason the huge number of submissions has become such a problem several times over the last couple of years." Enter artificial intelligence This is where artificial intelligence is starting to come in - both in local and national government, where it's being used to help process, sort and analyse public input. The Office of the Clerk does not use AI in processing submissions, but it's up to the individual committee overseeing the bill to decide whether to do so when the bills come to their end, Wilson said. For instance, it's been used along the way for the Regulatory Standards Bill. "Committees make their own individual decisions; they don't have any central guidelines around it at the moment." Wilson said the Office of the Clerk is looking at how it might use AI in the future, but is being cautious and "not rushing into it". "I still think ultimately we need to have human decision makers but AI has capacity to do things more quickly than people can - such as flagging submissions that are irrelevant or defamatory. Most submissions are absolutely fine." AI processing has been taken up by local councils, too. In Nelson, the city council worked with local firm the AI Factory to process submissions to their long term plan, Group Manager for Strategy and Communications Nicky McDonald said. 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