'It is hoped that this would lead to greater transparency'
Employers in New Zealand may soon be barred from taking disciplinary action against employees who talk about their remuneration in a new bill that aims to promote pay transparency.
The Employment Relations (Employee Remuneration Disclosure) Amendment Bill was filed last year by Labour MP Camilla Belich and has since passed the first reading in Parliament.
In the bill's general policy statement, it states that it seeks to amend the Employment Relations Act 2000 to protect employees who discuss or disclose their remuneration.
"This Bill would seek to ensure that employees can discuss and disclose their own pay rate to others without detrimental repercussions to their employment," it read. "It is hoped that this would lead to greater transparency in pay and allow any pay discrimination to be more easily identified and remedied."
The new bill comes as some individual and collective employment contracts in New Zealand include clauses that prohibit employees from discussing or disclosing their remuneration to third parties, including colleagues.
If breached, these clauses enable employers to subject the individual to "detriment or adverse treatment."
"This Bill would propose to make such clauses ineffective in relation to any adverse treatment by an employer (if the contractual term is broken)," the proposed legislation stated.
The bill is currently at the Education and Workforce select committee, which is expected to report back on the bill in the coming weeks, Radio New Zealand reported.
The ACT Party has decided not to support the bill, according to Workplace Relations Minister Brooke van Velden, who cited the risk of "creating tension" at work due to pay transparency.
This is also the reason cited by New Zealand First MP Mark Patterson, saying they are concerned about the "unintended consequences" that come with the bill.
However, Patterson noted that they would wait and see the bill after the select committee process, RNZ reported.
Meanwhile, Retail NZ chief executive Carolyn Young also told RNZ that while they support the bill, they are worried that making pay information available can be used against other businesses.
Nancy Romanyshyn, Senior Director of Total Rewards Strategy and Solutions at Syndio, recently spoke with HRD to discuss how to navigate workplace tensions from pay transparency.
Romanyshyn said communicating the company's compensation philosophy may be helpful.
"You thought your jobs for the same — they're not. Or you thought your skill sets are the same — they're not," she said. "That's part of our compensation philosophy. We pay according to the job, we pay according to your skill set. Those are all things we take into consideration."
And in case there are cases of legitimate disparities at work, she suggested ensuring that there are plans to make those corrections.
"Even if you're unable to make them all at once, having a plan for how you're going to incrementally close those gaps, I think is critical," she said.
Pay transparency legislation has been gaining traction across the world. The European Parliament recently adopted new rules that include banning pay secrecy to close the gender pay gaps.
