Experts provides tips for employers on how to comply with incoming pay gap legislation
Starting in 2024, employers with more than 100 employees will be required to publish their gender pay gaps.
This follows Parliament’s recent changes to the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023. Under the newly passed law, gender pay gaps will be published on the Workplace Gender Equality Agency (WGEA) website.
In 2023, Australia’s national gender pay gap was 13.3%. The average weekly full-time earnings of a woman in Australia are $253.50 lower per week than the equivalent for men.
“From April 2024, employers with over 100 employees - both private and Commonwealth public sector organisations - must provide additional information on their employees to the WGEA including age, primary workplace location, CEO and casual manager remuneration, and also report on sexual harassment, harassment on the ground of sex or discrimination,” Jo Alilovic, director 3D HR Legal, said.
“This is in addition to the already existing requirement to provide information on matters such as the gender composition of the workforce and governing bodies, availability and utility of flexible work arrangements, and equal remuneration between women and men.”
‘Employers will not be comfortable’
With the release of gender pay gap information, it could cause friction amongst employees, Graham Wynn, founder, Superior People Recruitment Specialists, said.
“It could lead to a loss of productivity as if some employees feel they that are being paid the same, or similar, to others who in their opinion do less, as they may drop back on productivity. I feel this could result in staff leaving if they feel they are being underpaid in comparison to others.
“For companies with heavy union involvement, this could lead to industrial action, as unions take up the case for increased wages for both individuals and groups.”
Employers “will not be comfortable releasing such information, as they are aware of the issues this may cause,” Wynn said. “With employees able to see such information, this could result in salary battles between employers to attract and retain their best staff, which in turn could lead to payroll costs on the employer.”
The simple way to address this imbalance is not to have a gender pay report, he said.
“Every employer should be able to pay their staff their worth for the job they are doing. If you have a higher level of education than another, but are doing the same job, then salaries should be similar. Qualifications and experience are important to access certain positions but if the role being performed is the same for all staff, regardless of gender, then salaries should reflect this.”
Wynn doesn’t think this information will bridge any perceived gender pay gaps as the reporting will only show median figures, not actual, and if there is a gender pay gaps, employers can submit a statement advising why such a situation exists.
“There will no consequences to force employers to amend salaries. In addition, this will create another level of reporting for employers adding more administrative time and costs to them.”
Consequences for failed reporting
Gender pay gap data for 2024 will cover 2022-2023 reporting. Data for Commonwealth public sector organisations will be based on 1 January 2023 – 31 December 2023 reporting. As private and public sector organisations follow different reporting timelines, the first publication of Commonwealth public sector organisation’s gender pay gaps will be published in late 2024 or early 2025.
“There are consequences if employers fail to provide the required information or provide false or misleading information,” Alilovic said.
Employers need to be aware that the WGEA has powers to review compliance by asking for more information, reviewing randomly selected reports or after assessing comments made by employees or employee organisations, she said.
“If an employer is assessed as compliant, they will be issued with a compliance certificate. If an employer is not compliant, they can be named in a report to the Minister that is tabled in both Houses of Parliament and the WGEA can also name the employer publicly by electronic or other means.”
Whilst this report may cause the organisation some public embarrassment, more importantly, having a known gender pay gap can also be costly, Alilovic said.
“For example, when women - and others - feel undervalued and underpaid, it is likely to result in their performance decreasing or them choosing to leave those organisations, creating performance and retention issues and pay disparities which are not adequately explained.”
That can look like gender discrimination and have a negative effect on an organisation’s brand, she said, “reducing the ability to attract high-quality employees and potentially to sell their product or service.”
What will be published?
Employer gender pay gaps will be published by mean, median and employer remuneration quartile.
For the first release of employer gender pay gaps in early 2024, WGEA will only publish employer gender pay gaps by median and remuneration quartiles.
In future reporting – when CEO and casual manager remuneration data can be included – employer gender pay gaps will be published by mean, median and employer remuneration quartiles.
Employers will be informed of their organisational gender pay gap well in advance of it being made public.
From 2024, employers will be required to report workforce data on:
- employee age (year of birth)
- primary workplace location
- CEO and casual manager remuneration.
Mandatory reporting means data will be provided by all employers, rather than a smaller sample that may choose to provide this data voluntarily.
These more detailed insights will help WGEA better understand the factors influencing equality in Australian workplaces. Improving understanding of this information will allow WGEA (and government more broadly) to drive targeted action for the benefit of Australian individuals, community organisations and businesses.
WGEA will publish employer gender pay gaps and workforce composition data by quartiles.
This means providing data on the full-time equivalent gender pay gap for the organisation’s highest paid quarter, upper middle quarter, lower middle quarter, and lowest paid quarter, along with the gender composition of each pay quartile.
The gender composition will state the proportion of women and men in each quartile.
