Pay secrecy
Key dates
7 December 2022: Pay secrecy clauses cease to have effect in Australia. 6 June 2023: Pay secrecy prohibition applies to any new contract entered into after this date.
What's changing to pay secrecy laws?
Any existing pay secrecy clauses, wherein employees are obligated to keep their remuneration confidential, whether in instruments or contracts, no longer have effect. Employees will have the ability to disclose (or ask someone to disclose) their remuneration, or terms and conditions of their employment that are reasonably necessary to determine remuneration outcomes. This means they can bring general protections claims in relation to adverse action for exercising this workplace right. Employees also have a right not to speak about their remuneration, if they do not wish to do so.
The amendments will also prohibit employers from including pay secrecy clauses in new employment contracts entered into from 6 June 2023. An employer may be liable for a civil penalty where they include a pay secrecy clause in a new employment contract from 6 June.
Background
Pay secrecy clauses, which prevent employees from discussing with others and revealing their salary, bonuses and other financial incentives, have previously been lawful in Australia and a common feature in employment agreements, particularly in industries where discretionary incentive and bonus payments are commonplace.
Actions
Before 6 June 2023
- Review all new standard form contracts to ensure they do not fall foul of the pay secrecy prohibitions and risk the imposition of a civil penalty
- Assess whether the removal of pay secrecy clauses may bring to light any perceived inequalities within your organisation, and consider whether additional communications or actions may be required.
From 6 June 2023
- Pay secrecy clauses are prohibited in any new contract entered into after this date