New Pay Secrecy Laws in Australia

New pay secrecy laws in Australia - Arrow White

New Pay Secrecy Laws in Australia

Recent law reform to the Fair Work Act 2009 has prohibited pay secrecy in Australia, granting employees new rights to openly share information regarding their pay in the workplace without repercussion.

Pay secrecy in employment contracts is now illegal

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, implemented on 2 December 2022, brought forth fresh measures to forbid the inclusion of pay secrecy clauses in employment agreements. As a result, employees can now openly converse about their remuneration details to other staff.

This means that, employment contracts or other written agreements signed after 7 December 2022 (which include pay secrecy terms) cannot be enforced by the employer. For employment contracts signed prior to 7 December 2022, pay secrecy terms may continue to operate until changed by the employer and employee. 

Further, as of 7 June 2023, pay secrecy terms are prohibited from employment contracts entirely. New employers cannot include these contract terms in any circumstances and can face penalties as a result.The Fair Work Ombudsman has the power to commence proceedings against employers for alleged breaches of this right.

What does this mean for employers and employees?

As a result of these recent changes, current and future employees in Australia have the right to share details about their pay and the employment terms and conditions that surround their pay (such as hours of work and bonuses).

It is important to note that employees are not legally obliged to disclose details about their pay to a colleague, if asked. These new changes are simply an added workplace right that may be exercised by an employee should they chose to do so.

Disclaimer: This publication is intended for general and informative use only and is not to be relied upon as professional financial or legal advice.

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