Gender pay gap

Employment and pay equity is about fairness at work. It means people have the same opportunities to participate fully in employment regardless of their gender.

Gender pay gap in New Zealand

The gender pay gap helps provide an understanding of high-level indicators on the difference between women’s and men’s earnings, as well as the benefits of pay and employment equity.

In 2022, research showed that men earn on average 10% more than women in New Zealand.

Across the country, women are under-represented in higher-level jobs. In fact, many women are employed in industries where more than 80% of the workers are women. These occupations tend to be lower paid.

Factors that contribute to the gender pay gap are:

  • the jobs women do — while there are some notable exceptions in New Zealand today, women are more likely to be grouped in a narrow range of occupations and at the bottom or middle of an organisation
  • the value put on women’s jobs — the skills and knowledge that women contribute in female-dominated occupations may not be recognised or valued appropriately in comparison to other jobs
  • work arrangements and caring responsibilities — more women combine primary care giving with part-time work, which tends to be more readily available in lower paid occupations and positions. This limits women’s access to better paying occupations and positions
  • bias in decision-making — research commissioned by the Ministry for Women discovered that conscious and unconscious bias are likely the most significant drivers of the gender pay gap. 

The Manatū Wāhine Ministry for Women and Te Kawa Mataaho Public Service Commission websites have more information about the gender pay gap and unconscious bias in the workplace. This includes insights on how the gender pay gap varies by occupation, industry and other factors.

Gender pay gap – Ministry for Women(external link)

What's my gender pay gap? – Ministry for Women(external link)

Pay equity – Public Service Commission(external link)

In March 2022, the Parliamentary Education and Workforce Committee released a report as part of their briefing on pay transparency. This includes information on the gender pay gap and their recommendations for the Government to develop pay transparency measures.

Briefing into pay transparency – New Zealand Parliament(external link)

The Organisation for Economic Co-operation and Development (OECD) has information on how New Zealand compares to other OECD countries.

Gender wage gap – OECD(external link)

Reasons for focusing on gender

There is a clear history of women’s opportunities and pay being specifically set according to gender. For example, until the Equal Pay Act 1972, it was legal to set separate rates of pay for men and women and exclude women from certain types of work.

The introduction of equal pay and anti-discrimination legislation has improved women’s pay rates and access to jobs. However, women’s earnings are still less than men’s, and women are still in different types and levels of jobs.

Gender inequality affects both men and women

Both men’s and women’s experiences of employment can be affected by gender. Women’s earnings may be lower, and men may have less employment flexibility and be expected to work longer hours. The opportunities and treatment of men and women workers are closely interrelated.

Pay and employment equity cannot be achieved for women or men unless the ways gender is affecting employment are identified and addressed.

Benefits of pay and employment equity

For women

  • Brings greater economic independence for women by increasing the choices available to them for paid work and other responsibilities.
  • Can reduce women’s reliance on income support and improve their working and retirement incomes, their capacity to make repayments on any student loan or other debts, and make contributions to their retirement savings.
  • Improves women’s prospects of getting higher-level jobs (where they are still under-represented), because it can increase their workforce experience.

For employers

  • Employees who are valued appropriately are more productive, show more initiative, and are more likely to be loyal and speak positively about their organisation.
  • Helps with employee retention because employees who are valued and respected are less likely to leave. Reducing the number of employees who leave an organisation because they can’t get flexible hours, are treated disrespectfully, or believe pay or recruitment practices are unfair will reduce the amount of turnover costs incurred by employers (up to 3 times each employee’s pay).
  • Helps increase the diversity of the workforce at all levels. Employers gain a wider range of applicants, styles, backgrounds, knowledge and experience, and the organisation benefits from increased innovation, inputs and perspectives, and better reflects a wider range of customers.
  • Is good for an organisation’s employer brand because employees value fair pay, and opportunities.

Benefits for New Zealand's economy and productivity

Employment and pay equity improves the supply and the skill level of labour. Having broader recruitment pools and employment practices unaffected by gender can upgrade workforce quality and productivity, while helping employers attract and retain the people their organisation needs.

When employment rates for female-dominated jobs are too low, it’s harder to attract and retain people who would be suited to, want to do, and want to stay in these jobs. When people are in jobs they are best suited to and are fairly treated and rewarded for their productivity without gender playing a part, the labour market functions better.

Better pay and conditions, such as the ability to work preferred hours, provide an incentive to enter and remain in paid work. Increasing the labour force participation of women helps meet shortages of labour and skills, increases the return on investment in women’s education and contributes to economic growth. 

The law

Equal Pay Act 1972

The Equal Pay Act 1972 prohibits discrimination in pay on the basis of sex. The Act was amended in 2020 to provide for a clear process for employees and unions to raise a pay equity claim directly with an employer rather than with the courts. The Act is unique because it allows for the comparison of male and female dominated workforces in different organisations and in different sectors.

Where sex-based undervaluation has been shown to be present, the Act recognises that it is possible for the work involved in 2 jobs to look different but require the same, or substantially similar, levels of skills, responsibilities, conditions, effort and experience, and in these situations, recognises that these jobs should be paid similarly.

The Court of Appeal decision in Terranova vs Service and Food Workers Union (SFWU) and Bartlett in 2014 held that if other employees of the same employer or of other employers in the same or similar enterprise or industry or sector would be an inappropriate comparator group, then regard can be had to what is paid to males in other industries. This means interpreting the Equal Pay Act 1972 as covering pay equity, not just equal pay.

A working group was established in 2015 to recommend principles that provide practical guidance to employers, employees and unions to address pay equity. The working group’s recommendations were reflected in the pay equity process in the 2020 amendments to the Equal Pay Act 1972.

Government policy

The Government supports organisations putting into place pay and employment equity response plans. It also recognises its own obligations within the public sector to address and respond to any identified inequities as part of good management practice and being a good employer.

Action taken across Government ministries with the assistance of the Public Service Commission has already helped to close gender pay gaps in the Public Service to its lowest ever, falling from 12.2% in 2018 to 8.6% in 2021.

Building on the success of the Public Service Gender Pay Gap Action Plan 2018–20, the Public Commission launched a new action plan in 2021.

Kia Toipoto – Public Service Pay Gaps Action Plan 2021–24(external link)

This new action plan aims to help close gender, Māori, Pacific and ethnic pay gaps in the public service, accelerate progress for women from ethnic communities, and create fairer workplaces for all, including disabled people and members of rainbow communities.

Assessing your workplace

To assess gender equity in your workplace, you can use the following process:

Pay and employment equity review process

Alternative resources and tools are also available, including the Te Orowaru toolkit.

Te Orowaru – Public Service Commission(external link)

  • Published:
  • Last modified:
  • Written for: Everyone
  • Share this page:
  • Print this page: