What’s the ‘Prohibiting Pay Secrecy’ law all about & how does it impact my veterinary team?
The new Prohibiting Pay Secrecy law is now in place which means it is important to consider if you have employees doing the same job but receiving different pay rates. This may have occurred due to performance reasons, but you may now be asked to justify why the pay rates are different, and how the employee on the lower rate can get to the same level as the employee on the higher rate.
Questions to Consider for Practice Owners & Managers
- Do you have a fair process for people to improve their rate of pay based on performance?
- If someone is underperforming, have you provided them all the training and support to succeed?
- Have you managed an employee’s underperformance fairly?
- Do you have thorough position descriptions, so employees understand expectations?
- Do you have clear policies, so employees are clear on expectations of behaviour?
Prohibiting Pay Secrecy
The Pay Secrecy changes prohibit secrecy about employees’ pay. The changes apply to employment contracts and other written agreements made on or after 7th December 2022, but transitional arrangements apply to these new laws.
Disclosing Pay & Workplace Conditions
The Fair Work Act now gives employees and future employees the right to:
Share or not share information about their:
- Employment terms and conditions needed to work out their pay, such as their work hours
Ask other employees (with the same or a different employer) about their:
- Employment terms and conditions needed to work out their pay, such as their work hours.
Employees can’t be forced to give this information to another employee if they don’t want to.
Employees can exercise these rights even after they leave their employment.
Pay Secrecy Terms
From 7th June 2023, pay secrecy terms inconsistent with the new workplace rights described above can’t be included in employment contracts or other written agreements that were entered into on or after 7th December 2022.
This means employees now have the following rights:
- The right to tell anyone else about their pay rates
- The right to ask anyone else about their pay rates
- The right not to disclose their pay rates
This relates to anything to do with remuneration including discretionary bonuses.
The Fair Work Commission now has the power to start court proceedings for alleged breaches of this new prohibition. Employers who have pay secrecy terms in their contracts that are inconsistent with the new prohibition could face penalties.
If a Fair Work instrument (such as an award or enterprise agreement) or an employment contract entered into on or after 7th December 2022 has a pay secrecy term in it, that term will have no effect and can’t be enforced.