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Gender pay gap

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

Many female workers in New Zealand work in occupations that are more than 80% female and these female-dominated occupations tend to be lower paid. Women are under-represented in higher-level jobs.

The gender pay gap is a high level indicator of the difference between women and men’s earnings. 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 clustered 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.

The Ministry of Women’s Affairs (external link) and Statistics New Zealand (external link) websites have more information about the gender pay gap.

Women at work: 1991-2013 from Statistics New Zealand (external link) has recent information on the most common and most segregated occupations for each sex, and looking at women in management, the professions, and the skilled trades in New Zealand.

The OECD website (external link) has information on how New Zealand compares to other OECD countries, which you may be interested to look at.

Reasons for focusing on gender in relation to employment equity matters

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.

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. Men and women cannot make the choices they want about how they share paid and unpaid work while gender affects employment. 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

  • brings greater economic independence for women and increases the choices available to them about paid work and other responsibilities.
  • can reduce women’s reliance on income support, 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.
  • benefits employers because 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 staff 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 reduces the amount of turnover costs incurred by employers (up to three 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.

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 and help employers attract and retain the people their organisation needs.

When 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, 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. 

Government policy

Employment and workplace relations is based on demonstrating:

  • good faith
  • natural justice
  • human rights
  • good employer practice
  • meeting legal requirements.

The Government supports putting into place pay and employment equity response plans, and recognises the obligations of public sector chief executives to make sure they continue to address and respond to any identified gender inequities as part of good management practice and being a good employer. Government encourages voluntary participation of public and private sector organisations in pay and employment equity projects.

Various organisations have pay and employment equity information, resources and tools available to both public and private sector organisations.

The law

The Equal Pay Act 1972

Requires that men and women doing work requiring the same, or substantially similar, skill, effort, responsibility and working conditions are paid the same. In female-dominated occupations, you can look at what men would be paid to do the same work (on the basis of skills, responsibility, conditions and degrees of effort) as well as any undervaluation of the work that comes from current, historical or structural gender discrimination.

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 (external link) was established in 2015 to recommend principles that provide practical guidance to employers, employees and unions in putting into place pay equity.

Assessing gender equity issues in your workplace

To assess gender equity in your workplace, check our information on Pay and employment equity review process.

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