New pay disclosure law misses the mark

Recently, Parliament passed the Employment Relations (Employee Remuneration Disclosure) Amendment Bill.
This law, brought by a Labour MP and supported by the National Party, makes it illegal for employers to stop staff from talking about their pay. Supporters say it will help close the gender pay gap. ACT opposed this law because we care about fairness, privacy, and the freedom for employers and employees to make agreements that work for them. The Bill only became law because National voted with Labour and the Greens.
I agree that pay discrimination is wrong and the gender pay gap is a serious issue. Every person deserves to be treated fairly at work and paid fairly for the job they do. If this Bill had real solutions, ACT would have supported it, but it will only make life harder for small businesses while giving more power to unions.
Big companies can hire HR staff and lawyers to manage disputes. Small businesses cannot. Most are family-run or employ just a few people. They rely on trust and good relationships. A single pay dispute can upset the whole team. Yet this law hands unions new leverage over these workplaces, while leaving business owners with fewer tools to manage them.
This Bill makes pay secrecy clauses unenforceable by employers, undermining the value of agreements between an employer and employee. Despite pay sharing remaining voluntary, the law creates an expectation that everyone should share their pay openly.
That puts pressure on those who would rather keep their pay private, creating tension in the workplace. Or it can spark disputes when comparisons are made without understanding the full circumstances behind someone’s salary, such as different skills or personal arrangements. If pay is compared openly without understanding the full context, it can cause jealousy and damage morale in a close team.
ACT put forward sensible improvements. The gender pay gap is concentrated among lower and middle-income earners, not people on executive-level salaries. Those earning above $180,000 generally have strong bargaining power and don’t face the disadvantages this Bill claims to fix. So, we argued that the Bill should have applied only to employees earning under $180,000. National joined the Greens and Labour in voting against that, confirming that this law wasn’t about pay inequality at all, but more about making it easier for unions to pry into everybody’s pay.
We also tried to protect common-sense flexibility, arguing that if an employer and an employee both prefer to keep pay private, they should be free to agree to that. We said bonuses and commissions should be excluded, because they are performance-based. And we wanted small businesses to have more time to update contracts. Sadly, National voted with Labour and the Greens to reject every one of these changes.
Small businesses already face rising costs, staff shortages, and more red tape. This law adds another burden. Business owners will be stuck sorting out disputes instead of looking after customers.
Workplaces run best on trust. Employers and employees both need each other, and they should be free to agree on terms that work for them. This law removes that choice. It tells people their signed contracts do not matter. That undermines confidence, not only about pay, but about other parts of the agreement too.
Pay transparency is not bad if it is chosen freely. Many workplaces already do it. But forcing every business to follow the same rule is the wrong way. What works in one business might not work in another, and one-size-fits-all rules from Parliament do not reflect the reality of running a business.
If you are worried about how this new law affects your workplace, I would be glad to hear from you. ACT will keep standing for fairness, privacy, and the freedom to make agreements that work, because those are the foundations of a positive work environment. And we will keep working towards policies that genuinely improve opportunity and equality, not laws that look good on paper.
-Dr Parmjeet Parmar