Sharing information about pay, no fear

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

Labour MP Camilla Belich’s bill, drawn out of the Parliamentary biscuit tin last week, would permit employees to discuss their pay with co-workers.

If passed, the Employment Relations (Employee Remuneration Disclosure) Amendment Bill will allow employees to talk about their pay without fear of retaliation by their employer.

“Being secretive about pay fuels gender and ethnic pay gaps and can lead to discrimination,” she said in a statement last week.

“It is often said sunlight is the best disinfectant and this bill will help to promote transparency and fairness in pay.”

Under the proposed legislation, sharing such information can empower workers to negotiate fair wages and benefits, and increased transparency will help address disparities, in particular, the gender and ethnic pay gap.

Two years ago, the government’s education and workforce committee had set a task of conducting a briefing into pay transparency, pulling together data on pay rates from larger employers, without compromising privacy, so that pay gaps could be identified, assessed, and addressed.

Submissions included a report by the Ministry for Women on the various transparency pay laws that are operating in countries such as Australia, Britain, Germany, Iceland, and Denmark; the work of the Human Rights Commission on the ethnic pay gap; the views of unions and employer groups; and a proposed framework for a New Zealand law by Mind the Gap, a campaign supported by a wide range of groups.

Pay transparency is a contentious issue.

While it can help close the gender wage gap, expedite the hiring process for prospective employees, and attract more qualified candidates, detractors might contend that there is the potential for it to worsen employee dissatisfaction and spark conflict inside the workplace.

One of the benefits of pay transparency is that it can help employees realise that the overall value of their increase is in keeping with an overall trend across the workplace, especially in cases where finances for wage increases are short.

Salary concealment frequently helps only the most skilled employees in negotiations.

Pay transparency, on the other hand, requires that each person’s compensation be reasonable in light of all other factors.

The extent to which employees will feel at ease disclosing their salaries remains to be seen.

Under an ideal scenario, everyone can have confidence that their pay reflects their skills, achievements, and tenure, provided that pay scales and ranges are openly defined. — NZ Herald