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Labor has changed the law around wage discussions and it should make remuneration fairer, says KeyPay co-founder.
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Ban on pay secrecy ‘will help level the playing field’
06 March 2023
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10 minute read
The ban on pay secrecy introduced by Labor is a positive first step that will help eliminate some of the unfairness around remuneration, says the co-founder and head of product at KeyPay, Phil Bernie.
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Introduced for new contracts under the Secure Jobs, Better Pay laws last December, the change meant staff could no longer be prohibited from sharing pay details with colleagues, Mr Bernie said on this week’s Accountants Daily podcast.
“There’s always been a bit of a taboo around pay and salaries and keeping it secret,” he said, “and generally it’s been considered to be for the benefit of employees.
“But there’s been lots of research done that says over time, particularly for minority groups within an organisation, it’s actually quite detrimental.
“So I think this is a really good, positive step.”
He said it would help level the playing field and address the gender pay gap.
“We’ve seen in other regions where they have outlawed pay secrecy there’s been a definite decrease in the gender pay gap and an increase in those minority wages being equalised across industries.”
He said it also reflected reality because despite the fear of being reprimanded by HR or management, salary information was already being shared in unguarded moments.
“Every Christmas party, every financial year party, at some point there’s information that slips out,” he said.
The benefits from open conversations would be felt during pay talks, he said, when management could no longer simply bow to the loudest voice.
“Where it has the most impact is when you’re negotiating your next pay increase or if you’re up for a promotion within your organisation, you can be confident in knowing that what you’re asking for is relatively comparable to your colleagues.
“It also means that management isn’t tempted to put outrageous or unreasonable pay rises in for people who they think are potentially more high risk or participating in hard-negotiating behaviour.
“Because they know if other people find out about it, then they’re in the awkward position of having to justify that.”
Employer criticisms that the change would feed a wage spiral were unfounded, he said, with the talent shortage the key factor in driving up pay.
“This is already happening because of the market conditions. I think it will level the playing field and make sure that people that may not have had access to this information previously or people that were previously concerned about having these conversations are now able to have these conversations and be comfortable.
“I think the market will still dictate what the overall wages will be for employees. I think it will in some ways help cap the top end and also help normalise wages for people who would otherwise struggle to get equal pay within their organisations.”
But on its own, the change was not a silver bullet.
“I don’t think that this one change in and of itself will magically bridge the pay gap, particularly around gender.
“What it does is open the conversation and I think what we really need to see from the government is for them to push additional legislative measures through that will help encourage employers to look at this more holistically.”
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