Pay Secrecy Laws in Australia: Updating Workplace Policies

Pay secrecy used to be fairly common in Australian workplaces. Many small businesses included clauses in employment contracts that discouraged (or outright prohibited) employees from talking about their pay, their pay rises, or the terms of their employment.

That landscape has changed.

Under the Fair Work Act, recent pay secrecy reforms mean employees generally have a legal right to disclose their remuneration and ask others about theirs. If your contracts or policies haven’t been updated, you could be carrying unnecessary legal risk - and it may also be affecting trust and retention in your team.

Below, we’ll walk you through what the pay secrecy changes mean for small businesses in Australia, what you should update in your contracts and policies, and how to manage pay conversations in a practical, compliant way.

What Are The Pay Secrecy Changes In Australia?

In simple terms, the pay secrecy changes (introduced through the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 and now in the Fair Work Act 2009 (Cth)) make it unlawful for employers to:

• include pay secrecy terms in employment contracts (or other written agreements) that stop employees from sharing pay information; or
• take adverse action against an employee because they disclose, or ask about, remuneration information.

These changes are designed to support pay transparency and reduce pay inequality. For small businesses, the big takeaway is that you can’t use contractual confidentiality to prevent employees from discussing pay.

It’s also important to understand what “remuneration” covers. It’s broader than base salary. Depending on the role and how you structure compensation, it may include things like:

• base salary or hourly rate (and whether pay is inclusive of super);
• bonuses and commissions;
• allowances;
• loadings (such as casual loading);
• non-cash benefits (for example, a vehicle allowance or other benefits); and
• any other amounts paid in connection with employment.

Note: the Fair Work rules about pay secrecy are legal rules, but what counts as “remuneration” for payroll, super and tax can be technical. If you’re unsure about how something should be treated in practice, it’s worth checking with your payroll provider, accountant, or adviser.

If you’ve previously relied on “confidentiality” wording to cover pay, it’s worth checking whether your clause is actually a pay secrecy term (or operates like one in practice). Even if a clause is unenforceable, leaving it in a contract can create confusion and lead to complaints.

Does This Mean Employees Can Share Their Pay With Anyone?

Generally, employees can disclose their remuneration and any terms and conditions of employment that relate to remuneration.

Practically, most pay discussions happen between co-workers. But the right isn’t limited to internal conversations only - and you should assume employees may discuss pay with external parties (for example, a union, a lawyer, a family member, or a prospective employer).

Separate to pay secrecy, you can still protect genuinely confidential business information (like pricing strategies, customer lists, or trade secrets). Just be careful not to treat pay information as “confidential” in a way that conflicts with the pay secrecy changes.

Why The Pay Secrecy Changes Matter For Small Business Employers

As a small business owner, it’s easy to think: “We pay fairly - this won’t impact us.” But the pay secrecy changes are not just about doing the right thing. They change how disputes arise, how employees talk about pay, and what a regulator or court may expect of your business if concerns are raised.

Here’s why these pay secrecy changes matter in day-to-day operations.

1. Your Existing Contracts Might Contain Non-Compliant Terms

If you use older templates, or you’ve been reusing the same contract for years, there’s a real chance your agreement includes a pay secrecy clause (even if it’s only one sentence).

That’s why it’s worth reviewing your Employment Contract template and removing or rewriting any pay confidentiality terms.

2. Your Managers Can Create Risk Without Realising It

Even if you fix your contract, risk can arise when a manager says something like:

• “Don’t discuss your pay with the team.”
• “Your salary is confidential.”
• “If you talk about pay, you’re being unprofessional.”

Those statements can become evidence of a workplace practice that discourages pay discussions - which is exactly what the pay secrecy changes are trying to prevent.

3. Pay Transparency Can Expose Inconsistencies

When employees talk about pay, it can highlight issues you didn’t know were there, such as:

• two team members doing similar work on different rates;
• legacy pay arrangements that were never updated;
• inconsistent allowances or overtime approaches; or
• poor documentation around how pay rises are decided.

This doesn’t mean you need a single “one size fits all” salary. But it does mean you should be ready to explain the reasons for differences (for example, performance, experience, tenure, qualifications, scope of responsibilities, or market scarcity).

Are Pay Secrecy Clauses Illegal? What Happens If You Already Have One?

Pay secrecy terms are not something to ignore or “leave in there just in case.” Under the pay secrecy changes in the Fair Work Act, the law limits your ability to include and rely on these terms.

In summary:

• Pay secrecy terms included in contracts entered into on or after 7 December 2022 are prohibited.
• Pay secrecy terms in contracts entered into before 7 December 2022 can’t be enforced from 7 December 2022 (they effectively have no legal effect from that date), even if they still appear in the document.

If you already have older employment contracts in place, a practical approach is usually:

• don’t try to enforce the clause (for example, don’t warn or discipline someone for discussing pay);
• update your template for all new hires going forward; and
• consider a variation or replacement contract for existing staff, particularly if you’re reviewing contracts anyway (for example, during a promotion, restructure, or salary review).

Even where a pay secrecy clause is unenforceable, it can still cause problems because it:

• discourages lawful workplace conversations;
• undermines trust (employees may assume you’re hiding something); and
• creates a compliance “red flag” if there’s ever a dispute.

What About “Confidentiality” Clauses In General?

Many small businesses still need confidentiality clauses - and that’s completely normal.

The key is drafting confidentiality obligations so they clearly protect legitimate business confidential information, without trying to categorise an employee’s pay as “confidential” in a way that conflicts with the pay secrecy changes.

If you’re unsure, it’s worth getting the clause reviewed so you’re not relying on wording that can’t be enforced (or that increases your risk).

How To Update Your Policies And Contracts After The Pay Secrecy Changes

If you want a practical checklist you can action this week, this section is for you. The goal isn’t just to “delete a clause.” It’s to make sure your documents, your managers, and your payroll practices are aligned with the pay secrecy changes.

Step 1: Audit Your Current Employment Documents

Start with your current:

• employment contract templates (full-time, part-time, casual);
• contractor templates (where pay secrecy language sometimes appears too);
• staff handbook and internal policies; and
• offer letters and onboarding documents.

Look for terms like “confidential,” “must not disclose,” “must not discuss,” or “salary is private.” Pay secrecy clauses are often short and easy to miss.

Step 2: Update Your Employment Contract Templates

Your contracts should avoid any term that prohibits employees from:

• disclosing their remuneration; or
• asking other employees about their remuneration.

At the same time, you can keep sensible confidentiality protections for trade secrets and other sensitive business information.

If you’re updating templates, it’s a good time to ensure your pay terms are clearly drafted and consistent with your intended pay structure - including whether you use salary vs wages, and how you handle commissions, bonuses, and allowances.

Step 3: Review Your Workplace Policies (And Make Sure They Match Reality)

If you have a policy that says “employees must keep their pay confidential,” it should be updated. This may be included in:

• a code of conduct;
• a confidentiality policy;
• an employment manual; or
• general “workplace behaviour” policies.

If you’re maintaining a suite of documents, it can help to pull these into a consistent Workplace Policy framework so managers aren’t relying on outdated guidance.

Step 4: Train Your Managers On What They Can (And Can’t) Say

This is one of the most overlooked steps.

Even with perfect documents, your business is exposed if a manager discourages pay discussions, threatens consequences, or treats pay conversations as misconduct.

Consider short manager training that covers:

• what the pay secrecy changes allow employees to do;
• how to handle pay complaints without escalating conflict;
• how to explain pay decisions in a consistent way; and
• what to document after pay reviews or negotiations.

Step 5: Set A Clear, Fair Process For Pay Reviews

The pay secrecy changes don’t require you to publish salary bands. But if pay discussions increase, you’ll want a solid internal process so pay decisions don’t look arbitrary.

Many small businesses use a simple process like:

• a scheduled annual review date (plus off-cycle reviews for promotions or major market shifts);
• standard criteria (performance, experience, responsibilities, skills scarcity);
• approval workflows (for example, manager recommendation + director sign-off); and
• written confirmation of any changes to remuneration.

This helps you respond calmly and consistently if an employee says: “I found out someone else is paid more than me.”

Common Questions Small Businesses Ask About Pay Secrecy Changes

Can I Still Ask Employees To Keep Other Employment Terms Confidential?

You can still protect confidential business information, and you can still expect professionalism.

But you should not ask employees to treat their remuneration as confidential in a way that restricts their legal right to disclose or discuss it. If your policy uses broad language like “everything about your employment is confidential,” it may need tightening.

Do The Pay Secrecy Changes Mean I Have To Share Everyone’s Pay Internally?

No. The pay secrecy changes are about employee rights to disclose and discuss their own pay, not an obligation for you to proactively publish everyone’s salary.

You can still keep payroll records and individual pay details secure. You should not disclose one employee’s pay to another without a lawful reason and appropriate authority.

What If Pay Discussions Cause Conflict In My Team?

It can happen - especially if there are unexplained differences in pay.

The most effective way to reduce conflict is to make sure your pay decisions are defensible and consistently applied. When people understand the “why” behind pay outcomes, pay transparency tends to become easier to manage.

It’s also a good idea to focus on respectful behaviour standards. You can set expectations like:

• pay discussions should not involve bullying, harassment, or discrimination;
• employees should not pressure others to disclose pay if they don’t want to; and
• complaints should be raised through appropriate channels if someone believes there’s an issue.

Those standards are about workplace conduct, not pay secrecy.

Are There Penalties For Getting This Wrong?

Depending on the circumstances, there can be legal consequences for including or trying to enforce pay secrecy terms, or for taking action against an employee because they exercised their rights.

Because these reforms sit within the Fair Work Act (including the general protections regime), contraventions can expose businesses and individuals to court-ordered penalties and other remedies in the right case.

More broadly, it’s important to remember that employment compliance failures can attract serious consequences under the Fair Work regime, including Fair Work Act penalties in the right case.

This is why updating contracts and policies is more than “paperwork” - it’s a practical risk management step.

Key Takeaways

• The pay secrecy changes mean employees generally have a legal right to disclose and discuss their remuneration and related terms and conditions.
• If your employment contracts or policies include pay confidentiality clauses, you should update your templates and avoid trying to enforce outdated terms (including clauses in pre-7 December 2022 contracts that can no longer be enforced).
• Manager training matters - even informal comments like “don’t talk about pay” can create compliance risk and undermine trust.
• Pay transparency can expose inconsistencies, so it helps to have a clear, documented process for setting pay and conducting pay reviews.
• Strong, up-to-date documents (including your Employment Contract and supporting policies) help you manage change confidently as your team grows.

If you’d like help updating your contracts and workplace policies for the pay secrecy changes, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.