Navigating NZ’s New Pay Disclosure Laws: What Employers Must Know in 2025

New Zealand’s Employment Relations (Employee Remuneration Disclosure) Amendment Bill introduces major legal changes around pay transparency. Employers must now protect employees who discuss their own remuneration—or risk personal grievance claims. Learn how to update your policies and reduce legal exposure before this law takes effect.

Contents

What is the Employee Remuneration Disclosure Amendment Bill?

The Employment Relations (Employee Remuneration Disclosure) Amendment Bill, introduced by Labour MP Camilla Belich in 2024, will create significant new compliance obligations for New Zealand employers. The Bill amends the Employment Relations Act 2000 to establish protected status for employee remuneration discussions, requiring employers to review and potentially restructure their workplace policies and management practices.

The Bill passed the committee of the whole House stage on 30 July 2025 and awaits its third reading. Upon passage and Royal assent, employers will need immediate compliance capability. Organisations should begin preparation now to ensure readiness when the legislation takes effect.

What are the new legal risks for employers?

New Personal Grievance Exposure
The Bill creates a new category of personal grievance under section 103 of the Act: "adverse conduct for a remuneration disclosure reason." Employers need to understand that any negative employment action taken against employees who discuss pay may now constitute grounds for a personal grievance claim.

Understanding Prohibited Adverse Conduct
Under proposed section 110AB, employers must avoid the following actions when connected to remuneration discussions:

High-Risk Actions:

• Terminating employees who have engaged in pay discussions;
• Offering different terms, conditions, or benefits compared to similarly qualified employees
• Imposing disadvantages not experienced by comparable employees; or
• Creating conditions that compel resignation or retirement.

Protected Employee Activities Employers Must Accommodate

Employers cannot take adverse action when employees:

• Discuss their own remuneration with any party (internal or external);
• Make inquiries about colleagues' remuneration; or
• Participate in pay-related discussions or respond to remuneration inquiries.

This means an employee who faces negative consequences after discussing pay—such as demotion, loss of benefits, or pressure to resign—can bring a claim. Critically, a reverse onus of proof applies.

Employers must now prove that pay discussions were not a factor in their decision-making.

Critical Legal Framework: Reverse Onus Provision

Warning for Employers: The Bill establishes a reverse onus of proof that significantly impacts employer liability: once an employee demonstrates that adverse conduct occurred and raises remuneration disclosure as a factor, the burden shifts to the employer to prove, on the balance of probabilities, that remuneration disclosure was NOT a substantial factor in their decision.

This reversal of traditional burden of proof creates heightened documentation and justification requirements for all employment decisions.

Risk Management Strategies

1. Policy Review: Audit existing employment agreements and policies for pay secrecy clauses that, while still technically lawful, may create liability risks if enforced through adverse actions.
2. Management Training: Implement comprehensive training for all managers and HR personnel on the new protected activities and prohibited responses.
3. Documentation Protocols: Establish robust documentation procedures for all employment decisions to demonstrate legitimate, non-retaliatory business reasons for any adverse employment actions.
4. Performance Management Systems: Review and strengthen performance management processes to ensure clear, objective criteria that can withstand scrutiny if challenged.

Compliance Considerations

• Existing Pay Secrecy Clauses: While not directly outlawed, enforcing such clauses through any form of adverse action will expose employers to personal grievance claims.
• Disciplinary Procedures: Revise disciplinary frameworks to explicitly exclude remuneration discussions as grounds for any negative employment action.
• Recruitment and Retention: Consider how increased pay transparency may impact recruitment strategies and retention programs.

Business Impact Assessment

Operational Implications

The Bill will likely accelerate pay transparency within organisations, requiring employers to:

• Prepare for increased internal pay comparisons and potential equity challenges;
• Develop defensible remuneration structures that can withstand scrutiny; and
• Anticipate and plan for potential pay harmonization pressures.

Legal Risk Exposure

Employers face increased exposure to:

• Personal grievance claims with reversed burden of proof; 
• Potential remedies including reinstatement, compensation, and reimbursement; and
• Reputational risks associated with pay discrimination allegations.

Strategic Recommendations for Employers

• Proactive Pay Equity Audit: Conduct voluntary pay equity reviews to identify and address disparities before they become grievance matters.
• Communication Strategy: Develop clear messaging to employees about the organisation's approach to remuneration transparency and equity.
• Legal Consultation: Engage employment law specialists to review current practices and develop compliant policies and procedures.
• HR System Updates: Implement tracking systems to monitor pay-related discussions and ensure no adverse actions follow such activities.

Conclusion

The Employment Relations (Employee Remuneration Disclosure) Amendment Bill represents a fundamental shift in New Zealand employment law that requires immediate attention from employers. While the legislation aims to promote pay equity, it creates substantial compliance obligations and legal risks that organizations must actively manage. Employers should view this not merely as a compliance challenge but as an opportunity to review and strengthen their remuneration practices, ensuring they are both legally compliant and competitively positioned in an increasingly transparent employment market.

Forward-thinking employers will begin preparation immediately, recognising that reactive approaches to this legislation may result in costly personal grievance claims and reputational damage.