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Reducing the Gender Pay Gap in your Business

Published November 09, 2020 (last updated February 24, 2021) -
gender pay gap will be closed by pay equity amendment act

Changes to the Equal Pay Act 1972 will apply from 7 November 2020 with a view to reducing, if not closing, the Gender Pay Gap. 

Studies have found that women in occupations traditionally performed by women, that is jobs where more than 60% of the workforce is female – such as Teacher’s Aides, or Nursing,– tend to be lower-paid than men doing the same job or a different job requiring the same skill and effortOn average, a woman earns 9.4% less than a man, though in some industries the difference may be as much as 30% percent or more. This is the gender pay gap. 

The changes aim to improve the process for employees to raise, progress and resolve pay equity claims, in order to address where women have been paid less than men doing work of equal value in different workplaces or industries. It also allows unions to bargain for higher pay for women at an Industry level. 

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Do You Have A Gender Pay Gap in Your Business?

Workers will be more engaged and productive if they know that they are being paid fairly, so it makes sense to close the Gender Pay Gap in every business. Consider the below to help identify areas where there may be a pay equity or equal pay gap:

  • Do you have mainly female employees?
  • Is the work that is being done by female employees currently or historically undervalued because of factors such as the nature of work being generally associated with women?
  • Do you have men and women in your business who have similar skills, responsibilities and experience?
  • Do those men and women work under the same conditions and put in similar amounts of effort?
  • If so, do you pay your male and female staff the same rates for doing the same job?
  • Are the men starting on higher salaries and progressing faster?
  • Are there more men at senior levels and in the types of roles that lead to more senior positions over time?
  • Is there slower career progression for employees who take parental or carers’ leave or work part-time?

What Can You Do to Close The Gap?

Assess the Gap

To close the gap, you firstly need to establish where it lies and how wide it is. Compare differences in pay between men and women across the business by analysing pay roll data and employee records:

  1. Determine the difference in pay across all men and women compared to the number of men and women in the organisation.
  2. Then check the pay difference between men and women at similar pay levels against the number of men and women at each level.
  3. Finally, compare the pays of men and women doing the same or similar work with the number of men and women in the business doing the same work.

You can also compare salaries and progression for men and women, and for full-time and part-time staff.

If the gap is in respect of pay equity, there is a set process to follow to assess if a claim is arguable, and if so, what is an equitable pay rate.

Make A Plan

Once you have identified and assessed the gap, based on your organisation’s circumstances make a plan to close the gender gap. You should set clear, measurable objectives and consider the following when drafting your plan:

  • Don’t make assumptions about the nature and value of work in jobs that are mainly done by women or mainly done by men
  • Identify and put a value on skills and knowledge whilst taking into account responsibilities and working conditions for each job in terms of the gender-inclusive job evaluation standard (available from Standards New Zealand).
  • Establish appropriate training and career development to bring both male and female employees up to an equal standard.
  • Recruitment and performance reviews can provide opportunities to set or increase employee pay and close the gap.
  • Encouraging flexible work and parental leave for both men and women can also help women advance at the same rate as their male colleagues.

Implement the Plan

Put your plan in place and monitor it closely through periodic analysis of updated payroll data and employee records and regular reporting and feedback.

Review the Plan

Review the plan regularly to see if it is tracking successfully and to see whether the objectives and means of achieving them need to be adjusted to reflect any changes to the business.

For more information on the amendments to the Equal Pay Act 1972 and what to do if you receive a pay equity claim, see our blog or call Employsure for free, initial advice on 0800 568 012

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,500 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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