Recently, a Chinese multinational tech giant dismissed a Project Manager after screenshots of his seven-figure compensation package were circulated online. The package was reportedly worth over RMB 3 million (about US$470,000). The company dismissed the individual on the basis that he had disclosed sensitive corporate information and permanently blacklisted him from future employment at the organisation. The screenshots went viral on Chinese social media and sparked nationwide discussion on compensation packages and pay confidentiality.
For Hong Kong employers, the practical question is not simply whether a pay confidentiality clause can be enforced, but whether relying on it is lawful, proportionate and commercially sensible.
Pay transparency vs pay confidentiality: competing philosophies
Employers and employees often view remuneration differently.
Based on practical experience, pay secrecy clauses do not appear to feature prominently in Hong Kong employment contracts, although it is difficult to assess how common they are across the market. Where used, they are usually aimed at protecting commercially sensitive compensation structures, reducing recruitment risk from competitors, complying with Personal Data (Privacy) Ordinance obligations in respect of salary data, and preserving bargaining flexibility where pay is individually negotiated. Examples include clauses requiring employees to keep salary, bonus and incentive arrangements confidential, prohibiting disclosure of remuneration details to competitors or external recruiters, or restricting disclosure of colleagues’ salary information without consent. For employers, pay may therefore reflect commercial strategy, market positioning, retention priorities, budget decisions and flexibility. That said, any confidentiality obligation should be carefully framed and proportionate, particularly where an employee is discussing only their own pay.
For employees, however, pay transparency can be one of the few ways to assess whether they are being paid fairly, to identify potential bias or discrimination and for individual career planning. Undeniably, there is a changing attitude towards pay secrecy at work, with many employees believing that pay secrecy is an obstacle to equal pay.
The law surrounding pay secrecy
Unlike some jurisdictions, there is no legislation in Hong Kong prohibiting pay confidentiality clauses or mandating pay transparency. Despite this, individuals may find it taboo to discuss their salaries, with cultural reasons playing a part.
In theory, pay secrecy clauses are binding in Hong Kong as there is no general prohibition to have such clauses in employment contracts. However, such clauses may not always be enforceable due to Hong Kong’s anti-discrimination framework.
Discrimination risk
Employers should be aware that Hong Kong's anti-discrimination legislation applies to all aspects of employment, including disciplinary action and dismissal. If a pay confidentiality clause is used to conceal an employer’s discriminatory pay practices or is enforced selectively against employees raising pay equality concerns linked to a protected characteristic (e.g. sex), employers may risk facing discrimination claims from aggrieved employees.
The high bar for summary dismissal
Under the Employment Ordinance, summary dismissal is reserved for serious misconduct and instantly ends the employment relationship without notice or payment in lieu. A mere breach of a pay confidentiality clause may not reach that threshold. On the contrary, an overly harsh response may expose employers to wrongful dismissal or constructive dismissal claims, particularly where the employee has simply discussed their own pay with colleagues.
What is happening globally?
The global trend sees employers and statutory bodies moving towards greater pay transparency.
The EU Pay Transparency Directive came into effect across the EU in June of this year. The rules seek to increase pay transparency, enforce equal pay and improve access to justice for employees who face pay discrimination.
In the US, transparency obligations are governed at state level rather than through federal legislation. Employers in California and Washington who fulfil the requirements must disclose pay ranges, and New York has recently enacted a law banning pay secrecy. The more notable shift, however, is in how large companies are behaving voluntarily, extending transparency well beyond what is legally required by publishing salary bands for all roles across the US, partly as a way to streamline compliance across multiple jurisdictions.
The regulatory landscape across the APAC region remains fragmented, reflecting substantial differences in regulatory approaches and requirements across jurisdictions. For example, in Japan and Singapore, publicly traded companies are required to report the gender pay gap in their annual securities filings (including information on wages, bonuses and allowances). In Australia, pay secrecy has been banned since 2023.
Hong Kong has not adopted equivalent pay transparency protections or legislation. Nevertheless, multinational employers operating here are increasingly influenced by global transparency initiatives, group-wide policies and market expectations.
What are the risks of blanket bans on pay discussion?
Even where legally permissible, contractual pay confidentiality clauses or broad pay confidentiality policies may carry practical risks that employers should consider:
- Trust and morale: employees may perceive secrecy as evidence that the employer has something to hide.
- Recruitment and retention: greater transparency elsewhere may place employers at a competitive disadvantage.
- Reputational risk: blanket restrictions may be viewed as suppressing legitimate discussions about pay equity.
- Unequal pay concerns: broad prohibitions may make it harder for employees to identify and challenge unjustified pay disparities.
Practical steps for employers
Instead, if Hong Kong employers want to maintain pay confidentiality, they may wish to:
- limit confidentiality obligations to genuinely commercially sensitive remuneration information;
- keep pay confidentiality policies under review in light of global transparency trends and legislative updates; and
- avoid asking candidates to disclose current or previous remuneration where this may breach an existing confidentiality obligation, and instead use transparent pay bands or objective role-based criteria to set compensation.
In any event, employers should act with caution and seek legal advice before taking disciplinary action where the disclosure concerns only the employee's own remuneration.
Conclusion
This case illustrates how seriously some employers treat pay confidentiality, but the better lesson for Hong Kong employers is one of proportionality and preparation. Pay confidentiality clauses may still have a role, particularly for genuinely sensitive information, but employers should avoid using them in a way that suppresses legitimate pay equity discussions or reinforces historic disparities through salary-history-based recruitment. As global trends point towards greater pay transparency, it is a question of when, rather than whether, Hong Kong employers will feel their influence.
