Ethnic and Gender Pay Reporting for Aotearoa / New Zealand - The Case for Change and Policy Recommendations

Many groups of workers in Aotearoa / New Zealand face significant gaps in their pay packets. These gender and ethnic pay gaps are driven in part by discrimination and the behaviours of employers.

Addressing these pay gaps will go some way to promoting a fair, equitable Aotearoa.

International experience has shown that the simple act of requiring organisations to report their pay gaps to the public significantly reduces them.

Strategic Pay is a key partner of mindthegap.nz. Their work provides innovative solutions to New Zealand organisations, helping to improve their overall performance by ensuring employee effort, remuneration and rewards are closely aligned with business objectives.

As our reporting partner, they'll be supporting opted-in businesses with the design and implementation of internal pay equity reporting measures. They will also be managing our public registry once it has launched.

Why share your pay gaps?

Need inspiration? Hear from three business leaders in New Zealand about the importance of measuring and reporting pay gaps for organisations:

What is a ‘Pay Gap’? 

It is the difference between the earnings of two groups of people

For example, the gender pay gap compares the median hourly earnings of women and men in full and part-time work.

So, if an organisation has a gender pay gap of 20%, this means that the [men] earned 20% higher median hourly pay than the women in the organisation.

The Māori pay gap and Pacific Peoples’ pay gap need to be reported as the link between our gender, ethnicity pay gaps and our child poverty crisis needs to be addressed with urgency. “Material hardship rates are much higher for Māori and Pacific children/ethnicities (23-28%) compared with that for European or Asian children/ethnicities (6-10%).

(Child Poverty in NZ Report prepared by Bryan Perry)

Why does measuring our pay gaps matter? 

Gender and ethnicity pay gap measures show who has access to the higher-paying roles in an organisation and who works in areas that attract higher salaries.

Research shows that much of the gap can not be explained other than by conscious or unconscious bias or discrimination.

(Ref: Empirical Evidence of GPG in NZ - Gail Pacheco1*, Chao Li1 and Bill Cochrane2- March 2017)

By measuring and closing the gaps, as a country we will ensure we are utilising all of our talent, all of the time.

Paying someone less for the same job is illegal under the Pay Equity Act 1972. In calculating pay gaps it is common for employers to find pay equity issues.

New Zealand law requires “that men and women doing work requiring the same, or substantially similar, skill, effort, responsibility and working conditions are paid the same”.

New Zealand’s Equal Pay Act legislation (1972 and subsequent amendments)

In breaching this law and failing to resolve breaches with urgency, employers can face hefty fines and prison time.

Who needs to make plans to know and close their Pay Gaps?

Board Directors, Chief Executive Officers, Chief Financial Officers, all Managers, particularly People and Culture Managers, and Business Owners.

Who needs to pay close attention to, and encourage the closing of, our company Pay Gaps?

Employees, Investors, Owners, NZX, our Government, Recruitment Agencies, the Media and anyone who is ever likely to buy something….!