The Policy
Australia is banning non-compete clauses for employees earning under $190,100 per year. Draft legislation drops Monday. The ban takes effect in 2027 and applies to new or modified contracts only.
Workers above that threshold, currently $183,100 under Fair Work and indexed annually, can still be bound by non-competes. The government assumes high earners have real bargaining power in contract negotiations.
What It Means for Sales Teams
Most SDRs, BDRs, and mid-market AEs fall below the threshold. Their non-competes become unenforceable in 2027. Enterprise AEs and sales leadership with total comp above $190k keep the clauses.
The catch: the threshold is based on base salary, not OTE. A $120k base, $200k OTE rep is covered by the ban. Commission does not count toward the threshold.
Employers relying on non-competes to lock in frontline revenue staff, account managers, and technical specialists need new retention strategies. Garden leave, better comp structures, and stronger onboarding are the obvious replacements.
The Enforcement Reality
Non-competes have always been hard to enforce in Australia. Courts routinely strike them down as unreasonable restraints of trade. This policy formalises what was already happening in practice for lower-paid workers.
For high earners, nothing changes. If you are a $250k OTE enterprise AE and you sign a 12-month non-compete, it still applies. The reform targets workers with less negotiating leverage.
ANZ Context
The threshold covers most workers in the Australian market. New Zealand employers are watching closely, though the policy is Australia-specific for now.
Treasury is framing this as broad-based competition policy, not a single-industry rule. The government cites e61 Institute research showing the ban could lift average wages by $2,500 per year for affected workers.
Assistant Minister Andrew Leigh: "Non-compete clauses can act like a padlock on opportunity, holding down wages and keeping people from jobs where their skills are worth more."
What to Do
If you employ sales teams in Australia: audit your contracts now. Non-competes below the threshold become void in 2027. Start building retention plans that do not rely on post-employment restrictions.
If you are a rep: your mobility improves in 2027, assuming your base is under the threshold. Until then, existing clauses still apply. Worth noting: companies rarely enforce non-competes against SDRs and AEs unless the deal pipeline or customer relationships are significant.