NZ Equal Pay Amendment Act 2020 comes into force: 4 aspects employers need to understand

HRD investigates how the new changes will affect employers

NZ Equal Pay Amendment Act 2020 comes into force: 4 aspects employers need to understand

Changes to New Zealand’s Equal Pay Act have come into force, marking a positive step towards reducing gender pay imbalance.

The Equal Pay Amendment Act 2020 came into effect from November 9, bringing about a focus on pay disparity in industries that predominantly employ one gender.

The changes were brought about after the 2013 New Zealand Court of Appeal ruling, Bartlett & Service & Food Workers Union vs Terranova Homes & Care.

The landmark ruling acknowledged that in certain industries, wages were lower because the work was mainly carried out by women, and as a result, the employer discriminated against its female workforce.

Leading pay equity champion, Stephanie Love, Founder of Stephanie Love Consulting, told HRD the Amendment Act is a step in the right direction to minimising the gender pay gap.

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She outlined four factors employers should consider in order to stay on top of these changes:

  1. Ensuring you are complying with the Equal Pay Act 1972. Review whether there are men and women performing the same role but receiving different pay. If their experience, skill set and qualifications are the same or similar in order to perform the role, then make adjustments to pay to ensure it is equal
  2. Review the gender make-up of your organisation. If there are particular roles that are mostly filled by women, find a role with a comparative skill set, qualifications, experience and complexity and compare the average pay of each of these roles. The comparison role may be filled by mostly men or a mixture of men and women. If the average pay across the two groups is different, take steps to rectify and increase pay levels of the undervalued population
  3. While looking at the data, it may be a good time to understand your organisation's gender pay gap position. This can be completed by reviewing the gender split by pay levels and identifying what proportion of women are receiving the highest pay, and what proportion of men are receiving the lowest pay. Reducing your organisation's gender pay gap is more than ensuring equal pay, it also requires a balance of genders at all levels and layers of the organisation
  4. Maintain a positive working relationship with your workforce's union(s) as this is likely going to be the source of a claim. By being transparent about pay practices from the beginning, you can reduce the risk of a claim before it happens. Claims take lots of time and resources so taking steps to rectify any possible grounds for claims can save time and money in the long run. 

As well as these areas of analysis, Love said applying diversity lenses during annual salary review processes are a vital tool to reducing the likelihood of a claim.

She said: “A good practice I am an advocate for is to specifically carve out a portion of the annual salary review budget for diversity imbalance pay fixes ahead of any other increases.”

Even if your budget has been hit during the pandemic, by identifying pay disparity you can formulate plans to correct it and demonstrate transparency to both employees and trade unions, reducing the risk of a claim.

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Large organisations with human capital divisions like EY, Deloitte and PwC can assist in analysis, as well as smaller firms such as Love’s own, Stephanie Love Consulting.

Richard Wagstaff, president of New Zealand’s Council of Trade Unions (CTU) welcomed the changes brought in by the Equal Pay Amendment Act.

He said: "We are closer to achieving equal pay in New Zealand. Now, we are better able to remove the barriers which have stood between working women and fair pay.

“We look forward to working with employers, most of whom share our commitment to eliminating the gender pay gap in NZ.”

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