The United Kingdom, Australia, France, Spain, Sweden, and South Africa have already introduced compulsory pay gap reporting. Photo: 123rf
About 900 businesses in New Zealand will be required to report their gender pay gap, in a bid to increase equity in the workplace, and increase transparency for workers.
The government has said it will launch a reporting system for businesses, and encourage them to release action plans addressing the drivers of the gaps.
A number of New Zealand companies, such as Xero, the Warehouse Group, and Tower already voluntarily publish their gender pay gaps.
The United Kingdom, Australia, France, Spain, Sweden, and South Africa have already introduced compulsory pay gap reporting.
"We need to ensure we're staying in line with international standards to attract highly skilled women to New Zealand and do what's right as an inclusive and forward-thinking country," Minister for Women Jan Tinetti said.
Initially, businesses with more than 250 employees will be required to report their pay gap, but after four years, businesses with 100 workers will be brought in too, increasing the number of businesses to almost 2700.
Businesses would also be encouraged to voluntarily release action plans, showing what they were doing to address their pay gaps. This would be reviewed after three years, to see whether it would be made mandatory.
But the legislation is yet to be drafted, and with only three weeks of Parliament sitting to go until it rises for the election, it is unlikely to happen this term.
"We've made the decision to announce our plan to introduce a reporting system early in the process so we can ensure that we get wide ranging input from stakeholders to inform the design of the system before legislation outlining the system is drafted," said associate minister for Workplace Relations and Safety, Priyanca Radhakrishnan.
According to the Stats NZ Household Labour Force Survey 2021, for every dollar a Pākehā man earned, a Pākehā woman earned 89 cents. A Māori woman earned 81 cents, and a Pasifika woman earned 75 cents.
The government also wanted to look at including ethnicity in pay gap reporting.
"Māori, Pacific peoples and other ethnic groups often face the compounding impact of both gender and ethnic pay gaps," Radhakrishnan said.
She said the government would engage with New Zealand companies already reporting their gender pay gap, such as Spark, Air New Zealand, My Food Bag, and Sharesies.
"We'll be engaging with them to learn from their experience and establish a universal model for reporting so there is consistency and guidance for employers and workers."
Plea for ethnicity to be part of any new law
Saunoamaali'i Karanina Sumeo. Photo: supplied
The most vulnerable and poorly paid workers will have to wait the longest for pay equity, according to the Equal Employment Opportunities Commissioner.
The government's latest pay gender move does not cover ethnicity or disability.
Equal Employment Opportunities Commissioner Saunoamaali'i Karanina Sumeo said the announcement was long overdue.
"Women, especially our women's groups and unions and others, have been calling for this for quite some time now - long before the Human Rights Commission joined the call. So we are very very happy to hear this but it is very much a first step."
Sumeo said it needed to cover all women rather than just those working for the big companies that would be included at the outset.
"Let's call it a crack in the wall, in the wall of secrecy we've been living with for generations. What we need to do now is pull the curtains wide and let the sun in."
The review was set to last three years and that would be a long time for those facing racism and other discrimination in their workplaces.
She wanted the government to move quickly and said it was "a huge disappointment" ethnicity was not being covered by the review.
Sumeo believed there was already enough evidence of how Māori and Pacific workers were being penalised in the workforce.
"Ethnicity must be an essential core of this piece of legislation as well as disability ... so a first step but there's so much to do and so much expectation from the public."
