Australians have started 2023 with a new right in their workplaces – the ability to talk freely about what they’re paid with whoever they want and to ask their colleagues about their salaries. Changes to the Fair Work Act mean employees can now discuss any aspect of their remuneration with anyone they choose such as co-workers, friends, family, unions and lawyers, writes Phil Parisis, General Manager of Product and Sales at My Business.

It’s designed to remove the gender pay gap and other forms of discrimination by promoting transparency in the workplace and brings Australia into line with other countries, such as the US and UK who’ve done similar.

Pay secrecy clauses stem from a time when talking about money was taboo for companies. They were put in place to stop colleagues from comparing their salaries and pushing for pay rises.

So now that they’re gone, how does this affect your business and what do you need to know about the changes?

Goodbye pay secrecy clauses – hello wage transparency

It’s important to know where you stand to make sure you comply with the new workplace laws.

The bottom line is that employers should not include pay secrecy clauses in any new or amended contracts being issued to employees.

• For older contracts that existed prior to 7 December 2022, any pay secrecy clause remains in effect unless and until that contract is varied for any reason, at which time the pay secrecy provisions will have no effect and should be removed.
• New contracts made since 7 December 2022 should not include any pay secrecy clause. If they do, they will not be enforceable.
• For all enterprise agreements/awards or other Fair Work instruments, any pay secrecy clauses are now unenforceable regardless of when they were created.

Employers have a six-month grace period to comply with the changes. Any new contracts issued after 7 June 2023 which still include a pay secrecy clause will expose employers to the possibility of significant fines for each breach.

Under the same legislation, employers should be aware of changes to how pay is advertised.

• Employers can still choose whether or not to advertise a rate of pay, but if they do so the rate offered must at least meet the minimum allowed under the applicable instrument for that position.
• If advertising a piecework job, employers should note that most awards and many enterprise agreements now guarantee minimum earnings at a period rate of pay (i.e. a time-base rate) for pieceworkers, in which case the advertisement must notify readers of that.

Find out more at fairwork.gov.au

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