New Zealand’s gender pay gap has remained relatively stable over the past decade, fluctuating between 9% and 12%. While progress has been made, the disparity persists, and discussions around pay transparency are becoming more critical. With the government considering the introduction of employment remuneration disclosure, businesses, employees, and policymakers are debating whether transparency could be the key to fairer pay.

Public attitudes towards discussing salaries have started to shift. A recent survey revealed that while 62% of respondents still feel uncomfortable sharing their salary with colleagues, there has been a 20% increase in openness compared to last year. This suggests that traditional taboos around discussing pay are beginning to break down. One driving force behind this change is the growing influence of younger generations in the workforce, particularly Gen Z, who prioritise transparency and fairness.

As New Zealand navigates potential policy changes, it’s crucial to examine the role that pay transparency can play in creating a more equitable job market. Could greater openness around salaries lead to fairer pay structures, particularly in addressing gender and ethnic pay gaps?

Breaking Old Habits: The Shift Towards Pay Transparency

In a recent discussion, Shannon Barlow, NZ Managing Director at Frog Recruitment, and Dellwyn Stuart, Founder of Pay Gap Insights Hub, explored the challenges and benefits of pay transparency. Despite some hesitation, Stuart highlighted the positive trend of increasing openness:

"By 2030, 30% of our employee base around the world will be Gen Z. And for Gen Z, transparency is one of their top values. They expect to be able to talk about these things, to see them openly, and to know that businesses have nothing to hide."

This generational shift is prompting businesses to reconsider their approaches. Many organisations are not deliberately paying employees unfairly, but outdated practices and ingrained habits contribute to ongoing pay gaps. Encouraging salary transparency could help break these habits and create more equitable pay structures.

However, change isn’t easy. As Barlow pointed out, employment contracts in New Zealand often include clauses that discourage or outright prohibit discussing salaries. This has reinforced a culture where people feel uncomfortable talking about money. Overcoming this reluctance requires a shift in both workplace culture and employment policies.

"There’s a fear of being judged"

Despite its benefits, pay transparency faces several barriers. One of the biggest is fear—both from employees and employers.

"There’s a fear of being judged," Stuart explained. "People worry that their pay isn’t representative of their value in society. But salaries reflect job structures, not personal worth. Roles like teaching and nursing are incredibly valuable to society, yet they don’t necessarily come with high salaries. We need to separate pay from personal value."

For employers, there is also the concern of scrutiny. Transparency forces businesses to ask themselves: Have we actually been fair in how we pay our employees? Are there unintended discrepancies? While this might feel like a challenge, Stuart sees it as an opportunity:

"There’s nothing to fear in pay transparency. It gives employers the chance to check their processes and ensure they are fair and equitable."

If implemented correctly, salary transparency should focus on pay bands and job roles rather than individual salaries, ensuring privacy while still allowing meaningful discussions around fairness.

The Benefits for Employers and Employees

Beyond addressing pay gaps, transparency has tangible benefits for both employers and employees. For businesses looking to attract and retain top talent, particularly younger workers, embracing transparency can be a competitive advantage.

"If you’re an employer interested in your future workforce, this is a hugely important value for Gen Z," Stuart said. "They’re not just teenagers anymore—some are in their late 20s and are key sources of future talent and innovation."

For employees, greater openness about salaries means having a clearer understanding of their earning potential and being able to advocate for fair pay. In many cases, individuals suspect pay disparities exist but lack the information to address them.

"It gives employees a basis to say, ‘Hang on a minute—I’m doing the same job with the same responsibilities, but I’m being paid less. This shouldn’t be happening.’ Transparency provides a foundation for fairer pay negotiations." Barlow noted.

Moving Towards a Fairer Pay System: What Needs to Change?

To make meaningful progress, New Zealand workplaces need to move towards structured, fair, and open pay practices. This means:

• Eliminating pay secrecy clauses – Many employment contracts still discourage salary discussions, reinforcing pay gaps. Removing these clauses would allow employees to have open conversations.
• Focusing on role-based pay transparency – Instead of sharing individual salaries, businesses should disclose pay bands and job role expectations. This ensures fairness while maintaining privacy.
• Encouraging businesses to self-audit – Employers should regularly review salary structures to identify and correct pay discrepancies.
• Creating a culture of openness – Employers should foster a workplace environment where discussing fair pay isn’t taboo but an expected part of business operations.

A staged approach to pay transparency could help both employees and businesses adjust to this shift. By taking gradual steps, organisations can ensure fairness without creating unnecessary disruptions.

The potential introduction of employment remuneration disclosure in New Zealand presents a real opportunity for meaningful change. While resistance remains, the growing demand for transparency—particularly from younger workers—suggests that businesses will need to adapt sooner rather than later.

By embracing pay transparency, New Zealand workplaces can move towards a fairer, more equitable future—one where employees have the information and confidence to advocate for fair pay, and businesses can ensure they are truly rewarding their workforce equitably.