Responding to a pay equity claim

To be eligible to raise a claim, the claimant must show that:

• they meet the circumstances and requirements  
• the claim has merit (see Step 3).

If you agree the above criteria are met, the claim can progress to the pay equity assessment process. This process might lead to a pay equity settlement, but it’s not guaranteed. Everyone needs to act in good faith, for example, making best efforts to work through the process in a timely way.

Note: All unsettled or undetermined claims as of 14 May 2025 are discontinued. Employees may raise the claim again using the process on this page if the new circumstances and requirements are met, and the claim has merit (see Step 3).

How to respond to a pay equity claim

1. Acknowledge the claim

Within 5 working days of receiving the claim, acknowledge receipt in writing (email or letter) to the claimant.
You must:

• notify every union that has 1 or more members doing the same or substantially similar work in your workplace and provide them a copy of the claim
• if the claim was made by an individual employee, remove any information that identifies them unless they have given you written permission to share those details.

2. Coordinate the claim (if multiple employers) 

If the claim involves multiple employers, you must:

• form a multi-employer pay equity process agreement
• decide on representation and decision-making processes.

The purpose of the agreement is to decide:

• if all employees covered by the claim do work that is the same or substantially similar
• whether the claim has merit
• what the bargaining process will involve.

Employers may opt out of the multi-employer process but must still progress the claim individually.

Unions can opt out of the multi-employer process if they have genuine reasons based on reasonable grounds, but the employer must still progress the claim individually. If it’s a multi-union claim, all unions must agree to act together to opt out.

Adding an employer to an existing claim

Another employer can be added to an existing claim if:

• the work is the same or substantially similar
• both the original and new employer agree the claim has merit
• everyone involved agrees to combine the claims (if not, the union must progress it separately).

Either the union or the employer can ask to combine the claims, as long as it’s before the first claim is settled. The request must be in writing and include:

• a description of the work in each claim
• an explanation of how the work is the same or substantially similar and any relevant evidence to support this.

Unions raising claims with same employer

If another union raises the same or substantially similar claim with the same employer before the first claim is settled, the unions must consolidate the claims.

Within 5 days of receiving the subsequent claim, the employer must notify each union that they are required to consolidate the claims.

If the unions can’t agree on how to progress the consolidated claim, any of them may apply to the Employment Relations Authority (ERA) for a direction.

3. Decide whether the claim meets the circumstances and requirements and has merit

To proceed to the pay equity assessment process, you must first decide if the claim meets the circumstances and requirements. If so, you must decide if it has merit. You must notify the claimant of each decision when it is made.

Decide if the claim meets the circumstances and requirements.

• If an individual employee has raised the claim, check if they are already covered by a union claim and whether they have raised a claim using another process (under the Human Rights Act 1993 or personal grievance through the ERA).
• If the claim was raised by a union, check at least 1 of the employees doing the relevant work is a union member and all work covered in the claim is the same or substantially similar.
• Check for previous settlements. A new claim cannot be raised within 10 years of a previous settlement for the same work and employees (unless the ERA or court allows it).

If the claim does not meet the circumstances and requirements, notify the claimant that it is discontinued.

If the claim meets the circumstances and requirements, decide if the claim has merit. For a claim to have merit it means:

• the work is performed by a workforce that is at least 70% female, and has been over the past 10 consecutive years
• there are reasonable grounds to believe that the work has been historically undervalued and continues to be subject to systemic sex-based undervaluation.

If the claim meets the circumstances and requirements and has merit, notify each affected employee and proceed to the pay equity assessment process.

If the claim meets the circumstances and requirements but does not have merit, notify the claimant that it is discontinued.

Timeframe for assessing a claim

You must decide whether a claim meets the circumstances and requirements and has merit within 60 working days of receiving the claim.

If you have reasonable grounds, you can extend this once by no more than:

• 20 working days, in the case of a claim raised with a single employer
• 80 working days, in the case of a claim raised with multiple employers, unless all parties agree to a longer extension.

If you extend the timeframe, you must notify the claimant as soon as reasonably practical but no later than 60 working days of receiving the claim. The notice must:

• specify the date that you will notify the claimant of your decision by, and
• include your reasons for the extension.

How to notify claimants that the claim is progressing

Give the claimant(s) and all affected employees (including any new employees) written notice that the claim is progressing.

Include information about the process for:

• bargaining
• settling
• implementation
• resolving disputes.

If the claim is from a union, any non-union employees have 20 working days to opt out of the claim. After that, you must supply the union with the name and contact details of any non-union employees that haven’t opted out as soon as practical.

How to notify claimants that the claim is discontinued

Give the claimant(s) written notice including:

• that the claim has been discontinued
• why the decision was made
• that they have options:
  • the decision can still be changed — both sides can agree to undo the decision
  • they can go to the ERA for a determination
  • they can raise a new claim as long as it meets all the requirements and has merit.

Explain the ways to challenge the decision by:

• asking for more details of the reasons for the decision
• going to mediation
• going to the ERA for facilitation
• going to the ERA for a determination.

4. Pay equity assessment

The parties involved in a pay equity claim undertake an assessment process to determine whether the employee’s work is undervalued on the basis of sex. This involves assessing the work of the claimants and comparing it to the work of suitable comparators that are not subject to sex-based undervaluation.

Assess and compare the work

Parties involved in a pay equity claim must find out if the employee’s work is undervalued on the basis of sex by assessing the:

• nature of claimant’s and comparator’s work, including:
  • the skills required
  • the responsibilities imposed
  • the conditions of work
  • the degree of effort required to perform the work
  • the level of experience required to perform the work
  • any other relevant work features
• terms and conditions of employment, other than remuneration, of the employees who perform the work and those of employees who perform comparable work
• remuneration paid to claimants and comparators.

Factors to consider when assessing claims

When making the assessment:

• recognise the importance of skills and responsibilities that are often overlooked or undervalued in jobs where most workers are women (70% or more), for example:
  • social and communication skills
  • responsibility for others’ well being
  • cultural knowledge and sensitivity
• consider the extent to which differences in pay may be due to other factors
• make decisions based on the time period since the job became mostly female (70% or more).

Selecting comparators

Appropriate comparators must be selected. You and the claimant don’t have to choose the same comparators, but if it is helpful, you can both agree which comparators will be used.

Selection of comparators must follow the below order of preference.

• If you employ comparators, they must be selected.
• If not, comparators must be selected from similar employers.
• If that’s not possible, comparators can be selected from other employers in the same industry or sector.

In addition to the requirements above, a comparator can only be selected if they are a male workforce that performs:

• work that is the same or similar work to which the claim relates
• work that is different to which the claim relates but which operates at the same or substantially similar level of skills and experience, responsibility, effort or working conditions.

If you and the claimant(s) agree, the employees covered by a previously settled pay equity claim can be used as a comparator if their claim was raised on or after 14 May 2025. This is in addition to a male comparator selected using the requirements above.

Comparators can’t be used if:

• that work is also undervalued due to sex-based discrimination
• the workforce is too small to be a meaningful comparison.

If you decide there are no appropriate comparators available, you must give the claimant(s) written notice that the claim is discontinued. Follow the same steps under Step 3: How to notify claimants that the claim is discontinued.

5. Resolution

Negotiate a written settlement agreement if sex-based undervaluation is confirmed.

A settlement may be phased in for a maximum of 3 years if the employee (individual claim) or union(s) and employer(s) agree, or if the ERA determines that it should be.

When a pay equity claim is settled, the agreement must state that it’s a pay equity settlement under the Equal Pay Act and include:

• the parties’ names
• a description of the work (for union claims) or the employee’s role and position (for individual claims)
• the agreed pay rate and whether the pay increase is immediate or phased. If phased, details of the instalments and timing (up to 3 years)
• any other agreed terms and conditions (besides pay)
• a summary of how the claim was assessed, including the comparators used.

If no settlement is reached, you can use mediation, facilitation or apply to the ERA for a determination.

If a settlement is reached, including where a determination has been made by the ERA or Court, you must:

• implement the new pay rate
• send a copy of the Chief Executive of MBIE as soon as practical.

Find out more about how to submit your settlement:

Submitting or requesting pay equity data

Find out more about the role of the ERA in pay equity claims:

Raising a pay equity claim

Mediation

Employment Relations Authority(external link)