Another exemplary move by the New Zealand government on ensuring gender-equality- Equal Pay Amendment Bill got passed with unanimous support in July 2020. The passing of the Bill has cleared the pathway for workers in female-dominated professions to claim equal pay.

Statistics of New Zealand (StatsNz) announced the gender pay gap of 9.3 percent in New Zealand in August 2019. Although the pay gap is consistently reducing each year in the last decade, with a 16.3 percent reduction since 1998, the pay gap remains one of the major determinants of gender-based inequality. The gender pay gap is measured by calculating differences in the median hourly wages of men and women.

Until 1960, the separate pay rates for men and women in the same work were considered legal in both the public and private sectors. The Government Service Equal pay act in 1960 was the first legal instrument acknowledging the pay discrimination and abolishing the gender-based pay differences in public services. In 1972, the Equal Pay Act was further extended to private sectors. Further, the Employment Relations Act 2000 also prohibits discrimination on employment on the grounds of sex. New Zealand is a signatory to many international agreements with the International Labor Organization and Convention on the Elimination of All Forms of Discrimination against Women, and it is continually striving to achieve gender equality in all forms.

The Equal Pay Amendment Bill comes in alignment with the Equal Pay Act 1972 and the Employment Relations Act 2000. The Bill provides a government designed and approved system to raise the pay equity issues and claim equal pay. “No one should be paid less just because they work in a female-dominated occupation – this is one of the biggest gains for gender equity in the workplace since the Equal Pay Act 1972,” says Julie Anne Genter, Minister of Women, New Zealand.

As per Andrew Little, Minister for Workplace Relations, “The Bill provides a clear and easier path for businesses, workers and unions to effectively and fairly claim for the equal pay, and encourages collaboration and evidence-based decision making to address pay inequity, rather than relying on an adversarial court process.”

The process for claiming pay equity as per the Bill requires ‘claimant’ (individual employee, a union, or multiple unions of the members working same or substantially similar work) to raise the claim in writing. The claims must be ‘arguable,’ i.e., the work is predominantly performed by female employees or is currently undervalued or has been historically undervalued. The employer must then decide, not later than 45 days of receiving the claim, that it is arguable. In case the employer does not consider the claim arguable, the claimant can refer the issue to mediation or seek a determination from the Employment Relations Authority. Upon consideration of the employer on the claim’s argument, the employer and claimant enter into bargaining to resolve the claim through pay equity settlement.

Causes of Gender Pay Gap 

A research report Empirical evidence of the gender pay gap in New Zealand  (led by Professor Gail Pacheco from AUT) has provided insights into the cause of the gender pay gap in New Zealand. The report highlights that the causes of the gender pay gap in New Zealand are complex and that ‘unexplained’ factors drive the majority (80%) of the gender pay gap.

The report shares that in the past, factors such as differences in education, the occupations, and industries that men and women work in, or the fact that women are more likely to work part-time determined the pay gap. However, in the present scenario, the factors are more linked to conscious and unconscious biases that negatively impact women’s recruitment and pay advancement. Likewise, the differences in men’s and women’s choices and behaviors regarding the appropriate types of work as per their sex, and allocation of unpaid work like caretaking and housework also determines and leads to the gender pay gap. The differences in attitude and behaviors also include men’s and women’s willingness to negotiate pay and conditions. Australian research in 2016 highlighted that men are 25 percent more likely to get pay raise when they ask.

Another reason leading the complex gender gap is occupational segregation, which means the clustering of male and female workers in particular occupations. For example, nursing is a female-dominated occupation, while construction is male-dominated. The female-dominated occupations tend to be lower-paid than those dominated by men. Likewise, vertical domination contributes to the gender pay gap, which means women are underrepresented in senior managerial positions that are higher-paid.