In this article, we explore how workplace reforms under the “Secure Jobs, Better Pay” Bill in Australia provide greater transparency around pay and offer enhanced family and domestic violence leave to employees.
Prohibition of pay secrecy agreements
Pay secrecy agreements (i.e. clauses in employment contracts or collective agreements which prevent employees from sharing how much they earn) are now prohibited in Australia. In other words, employees now have the right (but not the obligation) to openly discuss their pay.
When are the relevant dates?
The new law has been effective since 7 December 2022. Employers have a 6-month grace period (i.e. until 7 June 2023) to ensure any new employment contracts entered into after this date do not contain pay secrecy terms. Employers could face civil penalties of up to AUD 66,000 (approx. USD 50,000) per breach if such terms are included in contracts entered into from 7 June 2023 onwards. Employers will not be penalised if employment contracts entered into before this date contain pay secrecy clauses, rather, those terms will simply be unenforceable.
What should employers do now?
Employers should begin reviewing and updating employment contracts (particularly for new employees) and HR policies to reflect these changes before 7 June 2023. As well as removing any express pay secrecy clauses, employers should assess the definition of “Confidential Information”. Typically, the definition covers “terms of employment” therefore the right of employees to openly discuss their pay would now need to be specifically carved out of this.
Employees entitled to take 10 days’ paid family and domestic violence leave
From 1 February 2023, all employees of non-small business employers (those with 15+ employees) are entitled to take 10 days’ paid family and domestic violence leave each year. Employees of small business employers (those with less than 15 employees) will have the same entitlement from 1 August 2023. The general rule is that employees are entitled to their full rate of pay for the hours that they would have worked had they not taken the leave. This new entitlement replaces the existing entitlement to 5 days of unpaid family and domestic violence leave. Employees of small business employers can still access these 5 days of unpaid leave until the new paid leave entitlement becomes available to them.
The leave can be taken by employees who are suffering family or domestic violence from a close relative and who need time off to do something to deal with the impact of the that violence, which is not practical for them to do outside of their regular working hours (for example, this might include attending a court hearing).
Employers can only use information relating to an employee’s family and domestic violence leave: to satisfy themselves that the employee is entitled to take such leave; when required by law; or if it is necessary to protect the life, health or safety of another person. The Bill also requires employers to omit any information relating to this type of leave from an employee’s payslip.
What should employers do now?
It is recommended that employers review and update their employment and payroll documents, policies and systems, as needed, to comply with these new requirements.
Please get in touch with the MDR ONE team if you have any questions on the changes or require any support with reviewing employment contracts, policies and other HR documentation.