Non-compete clauses ban in 2027

From 2027, the Australian government has stated that non-compete clauses will be banned for staff members that are earning below the Fair Work Act high income threshold. As the legislation is prepared to be introduced, as a business owner you need to be aware of what to expect and what to avoid ensuring you remain compliant with Australian employment laws. Read on below to see exactly what’s changing and what you need to be prepared for. 

What’s changing in 2027

For employees that are earning under $190,100 in 2026 to 2027, companies will no longer be able to enforce a non-compete clause and prevent them from working for a competitor or a similar company when the legislation passes in 2027. One thing that should be noted though is contracts created before the date with non-compete clauses aren’t automatically unenforceable, so contracts created before the date may still be able to be enforced.

What you need to do 

Before the reforms are introduced, to remain compliant you should review your staff contracts and confirm who will be covered and not covered under the proposed laws. When creating new contracts, if the outlined salary is under the threshold, then you need to focus on clauses and protections that will not be affected for protecting your brand. You also should monitor the progress of the proposed legislation as there may be changes introduced once it is implemented. A proactive approach can save you from compliance issues with Fair Work later. 

Navigating Australian employment laws can be tricky, which is why having the right support can be the difference between compliance and non-compliance. At BrightHR, our goal is to empower Australian business owners in staying compliant with our 24/7 employment relations line, where you can reach an employment specialist at any time for guidance in a wide variety of issues affecting employers today. For more information, get in touch with us at 1300 029 198 or book a demo here.