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Pay Equity Settlement – Could This Be a Revolution?

Published July 10, 2017 (last updated June 10, 2022) - ANZ Head of Legal Services

The announcement of a whopping $2 billion pay equity settlement for 55,000 care and support workers across New Zealand’s aged and disability residential care and home and community support services has arguably sparked a wildfire of industrial relations reform.

What was initially a huge deal based on gender equity, has started the debate for change in other female dominated industries and traditionally underpaid sections of the workforce. At this stage, public sector employees have been the only workers directly impacted by the decision however, with such significant change happening in only two months where will this end? Will small businesses in other sectors feel the change?

What is the Pay Equity Settlement?

From 1 July 2017, workers in the effected sectors will receive a pay rise of between 15 and 50% depending on their qualifications and experience. Over the next five years, employees in this field will see their wages increase anywhere between $19 and $27 per hour, with those on minimum wage ($15.75 per hour) seeing their wage increase to $19 per hour. This is a 21% increase for those on minimum wage and works out roughly $100 per week extra in take home pay.

What next?

The settlement as it stands now only covers care and support workers in aged and disability care however, workers in other sectors such as mental health support and very recently those in the early education sector have lodged their claims for pay equity.

What does this mean for SMEs?

The changes are happening quick – the original settlement deal was reached two months ago and has quickly come into effect. As other sectors, in traditionally underpaid industries, lodge their own claim and head towards pay equity we can expect more debate around what this means for employers more broadly.

The Government has made a decision to address an inequality in one sector but has perhaps missed how far-reaching this could become. The changes made will have flow on well beyond those impacted already. Watch this space.

What do you think?

This is a hot issue and one that will impact industries right across New Zealand. Let us know what you think by sending your thoughts to [email protected]

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