New Zealanders don't tend to talk about pay. What would happen if we did?
'One night, at a work farewell, a few of us started talking about how no one knew what the others earned,' says Sandra. It was 2015. The group all worked in marketing and communications at a large bank which used a banding system to determine salary ranges – but some of the bands were $40,000 deep. Inhibitions shrugged off with the help of a few drinks, the colleagues divulged their salaries. Despite having a larger team and same-sized budget to manage, Sandra was earning $30,000 less than her colleagues. It took years, chance and wine for her to find out.
These kinds of stories filter through as tales of the importance of talking about pay, but they're relatively rare. There's a culture in New Zealand of not discussing pay with colleagues or friends. In my experience, it's seen as a little uncouth and confrontational. A new member's bill, the Employee Remuneration Disclosure Amendment Bill, aims to remove some barriers people face in talking about pay – namely the fear of retaliation from employers. When Labour MP Camilla Belich introduced her bill at its first reading in parliament in November 2024, she noted 'persistent and unexplained' pay gaps for Māori and Pacific workers and women. Her hope is that by bringing increased pay transparency, discrimination can be eliminated, she said. During the select committee process the bill received 225 public submissions – almost 90% were in support of the bill and 4% were opposed. Last Wednesday, the bill passed its second reading with support from all parties apart from Act and NZ First.
While fear of retaliation from employers may be a reason for colleagues not talking about what they're paid, only three cases related to dismissal following remuneration disclosure have been brought to the Employment Relations Authority or the Employment Court since 2000. People are free to discuss pay unless there is a pay secrecy clause in their contract. It's not known how common these clauses are in New Zealand – this week experts have told me 'not that common' and 'potentially more common than people thought'. What they have agreed on is that regardless, people in New Zealand don't tend to discuss pay with their colleagues or friends. Jarrod Haar, professor of management and Māori business at Massey University, says that 'we have a culture of secrecy' around pay, while Amy Ross, an independent expert in employment relations and investigations, describes pay as a 'taboo subject'. It seems, then, that the legal issues the bill deals with aren't the biggest barrier to pay transparency.
The mystery surrounding pay rates is a fairly recent phenomenon. For most of New Zealand's history, wages were set by the national awards system. The system, run by the state, set minimum pay and conditions across industries and jobs, made them public and reviewed them yearly with feedback from workers. That system was 'much more open and more public' in terms of wages, says Ben Peterson, assistant secretary at Unite Union. And so, even if money wasn't discussed at the pub or around the dinner table, workers knew roughly what was considered appropriate and fair for their industry and their neighbours'.
The awards system ended with the neoliberal reforms of the 1980s, replaced by the Employment Contracts Act 1991, which instead focuses on individual contracts and basic minimum conditions (minimum wage, 15-minute tea breaks, 10 days of sick leave, etc) set out for all. 'It's very individualised, and then that becomes an incentive for employers to discourage people talking about stuff,' says Peterson. Quite simply, if an employer is paying someone $26 an hour and others doing the same job $24 an hour, they don't want those workers knowing and then requesting $26. Individualising contracts also puts the burden of negotiating pay onto individuals, which can further reinforce bias on gendered and ethnic lines. It can be a 'don't ask, don't get' situation, and some people have been brought up not to ask.
In folding wages into individual contracts, companies have been able to treat them as confidential information, even without secrecy clauses. Simon Schofield from Auckland University's law school says that while there may have always been a cultural 'modesty' in New Zealand about pay rates, the neoliberal system has allowed businesses to 'play into that cultural norm' to keep people quiet about their pay in order to suppress wages. After the reforms, the share of GDP that goes to wages dropped away. 'At the end of the day, the companies are making substantial money out of that,' he says. Unions and collective agreements work against this, but in March last year only 14.5% of employees in New Zealand were part of a union.
Ross says another problem is a lack of understanding of employment rights and pay in New Zealand. 'It's not taught at school. It's not really taught anywhere.' Ross was once contracted to give advice to students on moving from universities into the workplace. She was working with a group of students in their fourth and final year of studies – 'highly intelligent people', she says – when one of them put their hand up to ask a question. 'What's a union?' they asked. Ross was shocked. 'This is where we are, actually,' she says. 'People don't even know how to access the fundamental rights at work here.' She says that this allows for people, particularly more vulnerable people, to be exploited in the workplace.
But it's not only the people on low wages who don't want to talk about pay. People who suspect, or know, their pay is higher than their colleagues' are often uncomfortable or embarrassed to talk about it, says Ross. 'People who are on huge, big, fat salaries – they feel like they don't want to talk about that. Maybe it's time to start asking why.'
Peterson has found that some employers aren't great at talking about pay either. 'Every employer likes to think of themselves as a good employer,' he says, but evidence to the contrary – like low wages – often emerges during negotiations between the union and employers. 'People get very personally confronted,' he says. Instead of focusing on the numbers and facts in front of them, some employers can get offended by a perceived attack on their character. Peterson says this is 'unhelpful' during negotiations.
For Sandra, knowing that her colleagues earned more gave her the onus to ask for a pay rise and know she was justified. 'I did and got it,' she says. 'It definitely helps to have a sense of what others are earning and some sense of solidarity.'
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