Pay Secrecy: Can You Tell Employees To Keep Their Salary Secret?

Talking about pay at work used to be a bit taboo. Many employers even built pay secrecy into their contracts to avoid awkward conversations or internal comparisons.

That’s changed. Australia’s Fair Work laws now give employees a clear right to share (or not share) their pay information. This means old rules about keeping salaries confidential need a rethink - and your contracts and policies may need an update.

In this guide, we’ll walk you through what the law says, what you can and can’t do about pay discussions, and practical steps to manage transparency while protecting your business. If you’re reviewing contracts or planning a new remuneration framework, it’s best to get the settings right now so you can focus on running your team with confidence.

What Is Pay Secrecy And What Changed In Australia?

Pay secrecy refers to policies or contract clauses that stop employees from discussing their pay with colleagues. Historically, many Australian workplaces used these clauses to limit pay comparisons and negotiations.

From 7 December 2022, the Fair Work Act 2009 was amended to create a workplace right for employees and prospective employees to:

• Disclose their remuneration (and related terms and conditions) to any person
• Ask other employees about their pay (others can choose whether to share)
• Choose not to disclose their pay to anyone

Key points you should know:

• Pay secrecy clauses in new employment contracts are prohibited. For contracts made or varied on or after 7 December 2022, you must not include a term that bans pay discussions.
• Existing pay secrecy clauses became unenforceable on 7 December 2022. Even if a clause remains in an older contract, you cannot rely on it. If you later vary that contract, the prohibition applies going forward.
• From 7 June 2023, penalties can apply if you include pay secrecy terms in new contracts. There are also general protections (adverse action) risks if you take action against someone for exercising their right to discuss pay.

In short, employees now have a protected choice about whether to share their pay, and employers can’t prevent or punish those discussions.

Can You Tell Employees To Keep Their Salary Secret?

Generally, no - you can’t require employees to keep their own salary secret, and you can’t take adverse action if they choose to talk about it. That means no disciplinary action, negative performance consequences, or threats for discussing pay.

There are some nuances worth understanding:

• You can’t stop employees from disclosing their own remuneration. That includes base pay, loadings, allowances, bonuses, incentive structures, or any other terms needed to work out their pay.
• You also can’t require employees to disclose their pay. The right cuts both ways - it’s the employee’s choice.
• This right belongs to the individual. You shouldn’t disclose one employee’s pay to another without permission. Respecting employee privacy and handling records appropriately still matters.
• Managers should not discourage lawful pay discussions. Coaching managers on how to respond if pay comparisons arise will reduce risks and maintain trust.

For many employers, the shift isn’t just legal - it’s cultural. Pay conversations may increase. The most effective response is to build a fair, consistent remuneration framework and communicate it clearly to your team.

What Should You Remove Or Update In Your Contracts And Policies?

Now is a great time to audit your employment documents. Here’s a practical checklist.

1) Employment Contracts

Remove any terms that ban employees from discussing their pay. If you’re issuing new offers, make sure your Employment Contract template no longer contains pay secrecy or blanket “confidentiality” language that captures remuneration.

For older contracts, remember those pay secrecy clauses are already unenforceable. When you vary or renew those contracts, ensure the updated version also complies with the new laws. If you need to adjust your documents more broadly, this is a good opportunity to address classification, overtime, bonuses and any award or enterprise agreement interactions in one go.

If you’re changing terms (for example, clarifying remuneration or hours), follow a fair process and get valid agreement. Our guide on changing employment contracts steps through the key compliance points.

2) Workplace Policies

Review your confidentiality and communications policies. Replace any prohibitions on discussing pay with guidance that focuses on respectful conduct, not silence. It’s appropriate to set expectations around professional behaviour, but you can’t restrict an individual’s right to share their own pay information.

If you’re updating your handbook, a concise Workplace Policy can align team expectations with the new law and reference how managers will handle pay queries and complaints.

3) Remuneration Frameworks

Consider formalising how you set, review and communicate pay. Transparent criteria (like skills, experience, role scope and performance) help employees understand decisions, reduce disputes and support equal remuneration compliance.

If your roles are award-covered, make sure your settings align with the relevant modern award’s classification and minimums. Getting advice on modern awards can help you position rates correctly and avoid underpayments.

4) Hiring Processes And Offer Letters

Avoid any wording that implies pay must be kept secret. It’s fine to treat your internal processes and commercial strategy as confidential, but you can’t restrict a candidate’s right (as a prospective employee) to discuss the remuneration you offer them.

Make sure your recruitment collateral and job ads don’t suggest secrecy. Where possible, include a pay range or classification so candidates can assess suitability early.

5) Access And Privacy

Even though employees can talk about their own pay, not everyone in your business should access everyone else’s pay details. Limit access to employee records to staff who need it for their role, and provide guidance on handling sensitive information securely.

Training and a clear approach to staff records - for example, using an Employee Privacy Handbook - will help your HR and payroll teams manage requests and data appropriately.

Practical Employer FAQs: Handling Real-World Scenarios

Can We Ask Staff To Keep Offers Confidential During Recruitment?

You can’t prevent candidates or employees from discussing the remuneration you offer them. That said, it’s reasonable to protect other business information - for example, your financial forecasts, client lists or product plans - using tailored confidentiality terms or a suitable Non-Disclosure Agreement. Just ensure any confidentiality wording doesn’t attempt to capture pay.

Can Managers Share One Employee’s Pay With Another?

The right to disclose belongs to the individual employee. Managers should avoid revealing an employee’s pay to others unless the employee consents or there’s a lawful need to know. Keep your internal permissions tight and remind leaders to speak to HR before making any disclosures.

Can We Set Ground Rules For Respectful Discussions?

Yes. You can set expectations about respectful conduct, zero tolerance for bullying, and using proper channels if concerns arise. What you can’t do is ban or discourage employees from discussing their own pay. A clear Workplace Policy can strike this balance and give managers a script to handle questions constructively.

What If Pay Comparisons Lead To Disputes Or Morale Issues?

This is where a consistent remuneration framework is invaluable. If employees understand how roles are classified and how pay is set and reviewed, most questions become easier to resolve. Review your structure, check for compression risks (e.g. newer hires paid more than experienced staff), and schedule periodic reviews to keep settings fair and competitive.

Do These Changes Affect Bonus Confidentiality?

Employees can disclose the terms and conditions needed to work out their remuneration, which can include bonus eligibility, rules and payments. If bonuses rely on genuinely confidential business information (like client revenue), focus your confidentiality settings on the business data - not the employee’s right to discuss their pay outcomes.

What Are The Risks If We Ignore The New Rules?

Including pay secrecy terms in new or varied contracts can attract civil penalties. There’s also a general protections risk if you take adverse action because someone discussed pay. The safer approach is to update your documents and train managers early, rather than wait for a complaint to force change.

Steps To Move Toward Pay Transparency (Without Losing Control)

Shifting to a transparency-friendly model doesn’t mean sharing everyone’s exact salaries on day one. Here’s a practical, staged approach.

1. Audit And Remove Pay Secrecy Terms. Refresh your Employment Contract templates and any offer letters. Clean up policies that inadvertently restrict lawful pay discussions.
2. Map Your Roles And Classifications. Align positions to the correct award or internal job architecture. This ensures base rates are lawful and provides a backbone for pay bands.
3. Set Pay Bands And Criteria. Define ranges and the factors that move someone through a band (skills, tenure, performance, responsibilities). This is your decision-making framework.
4. Train Managers. Give leaders clear talking points for common questions: how pay is set, when reviews occur, and how to raise concerns respectfully.
5. Communicate Your Approach. Start with principles and process (e.g. “we pay at market, we review annually, we use bands”). You can decide how much detail to publish now versus later.
6. Handle Requests Thoughtfully. If an employee raises a comparison, check their classification, verify market data, and respond with your framework. Consistency is key.
7. Document And Iterate. If your structure is new, pilot it, gather feedback and refine. When you’re ready, embed it into your policies and manager toolkits.

If you’d like support designing a compliant framework or updating documents, our employment lawyers can help you implement a practical, risk-aware plan.

What Can You Still Keep Confidential?

The law targets pay secrecy clauses - it doesn’t make all business information fair game. You can and should continue to protect sensitive business information, such as:

• Client lists, pricing models, product roadmaps and financial forecasts
• Trade secrets and proprietary methods
• Security-sensitive systems or processes

Use well-drafted confidentiality terms that focus on business information rather than an employee’s right to talk about their own remuneration. If you need help tailoring confidentiality language across your documents, we can review your suite alongside your pay transparency updates.

Key Takeaways

• Employees in Australia now have a workplace right to share (or not share) their pay; you can’t prohibit or penalise lawful pay discussions.
• Pay secrecy clauses are unenforceable and must not be included in new or varied contracts; penalties can apply if you include them.
• Update your Employment Contracts, offer letters and Workplace Policies so they set respectful conduct expectations without restricting pay discussions.
• Build a clear remuneration framework (role mapping, pay bands, criteria and review cycles) and train managers to handle comparisons consistently.
• Protect genuinely confidential business information using targeted confidentiality terms or an appropriate Non-Disclosure Agreement, without capturing pay.
• Ensure your settings align with any applicable modern awards to avoid underpayment risks and support fair, transparent pay decisions.
• If you’re changing terms or structures, follow a proper process and get agreement - our guide to changing employment contracts covers the essentials.

If you’d like a consultation on updating your pay settings, contracts and policies for Australia’s pay secrecy laws, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.