The Government will soon require close to 900 businesses to report their gender pay gap which has largely been welcomed by workers unions.
On Friday, the Government announced around 900 businesses with more than 250 employees will have to report their gender pay gap, and then those with more than 100 workers to be introduced later.
Minister for Women Jan Tinetti and Associate Minister for Workplace Relations and Safety Priyanca Radhakrishnan made the announcement on Friday saying it marks a "significant step in closing the pay gap for Kiwi women".
"The reality is that women have different experiences in the workplace than men, and change is needed. Requiring companies to publish their gender pay gap will encourage them to address the drivers of those gaps and increase transparency for workers," said Minister Tinetti.
The move puts Aotearoa in line with Australia, Canada and the United Kingdom, which have introduced gender pay gap reporting.
"We need to ensure we’re staying in line with international standards to attract highly skilled women to New Zealand and do what’s right as an inclusive and forward-thinking country," said Minister Tinetti.
Over the course of four years, the initial 900 businesses will increase to almost 2700. Minister Radhakrishnan said action plans will be voluntary to begin with, and will be reviewed after three years to determine if it should be made mandatory.
"The Government is also committed to exploring the inclusion of ethnicity in pay gap reporting as Māori, Pacific peoples and other ethnic groups often face the compounding impact of both gender and ethnic pay gaps. Through this next phase of consultation, we’ll be able to consider the inclusion of ethnicity before legislation is drafted."
Unions react
The New Zealand Council of Trade Union national secretary Melissa Ansell-Bridges said the announcement was a "great start" to improving Aotearoa's culture towards pay transparency.
"We know that a culture of greater transparency will empower working people to continue to improve their pay."
The Public Service Association said the move is a "cautious step" in the right direction towards closing the gender pay gap.
Public Service Association national secretary Kerry Davis said women still earn 9 percent less than men do on average.
"Pay gap transparency is important because without it, discrimination is hidden, and this reduces awareness and pressure to address it," Davis said.
Davis said transparency is also needed by ethnicity, with Pacific women carrying " a double burden and have the lowest pay rates in the country".
"We urge the Government to adopt mandatory ethnic pay gap reporting as well."
Davis said the association knows pay transparency works because the Public Service is doing it.
"Since 2018 the public service gender pay gap has dropped from 12.2 percent to 7.7 percent. This is because agencies have identified their pay gaps and we've worked together on action plans to eliminate those gaps."
