NZ’s Equal Pay Amendment Act: 4 Questions for Employers

The Equal Pay Amendment Act in New Zealand came into effect on 9 November, signifying a positive step towards narrowing the gender pay gap. The amendments have a focus on industries that predominantly employ one gender, providing a clearer pathway to pay equity by rendering it significantly easier for the affected to pursue an equal pay claim.

While a hugely positive development, the Equal Pay Amendment Act comes with some stipulations that HR teams must be across to be compliant with new legislation. Failing to do so could be costly, from both a financial and reputational perspective. Currently, there are more than 86,000 New Zealanders progressing 15 pay equity claims in education, health and the public sector,^[1] while in the last term of Government, 23,600 employees received a pay equity settlement – some of which saw up to 30% pay increases for claimants.

These claims demonstrate just how successful the system is – and will continue to be – in uncovering incidents of unequal pay for employees. It’s also a warning that organisations must get their own backyards in order. So how can HR departments remain compliant with this Act?

Below are four questions New Zealand HR professionals must ask themselves to ensure compliance with this new legislation.

• Are there men and women in your organisation performing the same role but receiving different pay?

This question seems an obvious one, but it’s often surprising how little visibility HR teams have of workforce remuneration, and the lack of standardisation associated with pay grades.

Using remuneration software that provides users with visibility of pay grades will ensure that HR professionals can easily access an overview of employees’ pay rates and assess whether there are any gender discrepancies.

Pivot, an ELMO company, offers software that helps professionals to manage the critical business process of pay reviews and pay parity. Read more about our remuneration solution.

• Are there men and women in different roles with similar levels of seniority receiving different pay?

While a different role may justify a different salary regardless of recipient’s gender, it’s important to look at the seniority of each job role. For example, do you have a female in one department performing a job which – although different – holds a similar level of complexity to that of another role performed by a male, yet the male receives a higher salary? If the average pay across the two groups is different, this should be promptly rectified with increased pay levels for those whose salary is lacking.

If your organisation does not have a formal salary banding system in place already, it’s time to establish one. This way, there can be no room for gender pay discrepancies for those at an equal level.

• What proportion of the highest-paid employees are women versus men?

Look at the gender split for the different pay levels. Is the proportion of those receiving higher pay more skewed towards a certain gender? This can be reviewed by examining the gender split by pay levels and identifying what proportion of women are receiving the highest pay, and what proportion of men are receiving the lowest pay.

• How is your relationship with your workforce’s union?

Unions are likely to be the source of most gender pay claims. Ensuring a positive, transparent relationship with unions from the very beginning will help to mitigate the risk of legal issues. By maintaining a strong relationship with the union, companies can get ahead and assess whether any employees have any potential grounds for claims before they happen.

The software-as-a-service (SaaS) products offered by Pivot, an ELMO company, provide “best in class” solutions for the critical and often emotional business processes of salary reviews and performance management, which drive employee engagement and organisational performance. Our goal is to remove the risk, complexity and overhead of managing remuneration and performance, so our clients gain control and focus more on adding further value to the business.

Pivot Software was acquired by ELMO Software in 2018. Being part of the ELMO Group means that users of Pivot, an ELMO company, now have access to an extended range of cloud-based HR and payroll solutions from one vendor, offering one dashboard, and one user-experience.

ELMO Software provides innovative cloud HR and payroll technology to more than 1600 organisations across APAC. ELMO’s suite of HR and payroll solutions can be used together or stand alone and are configurable to your organisation’s processes and workflows. ELMO helps you to automate and streamline your HR & payroll operations, across the employee lifecycle from ‘hire to retire’. For further information on any ELMO solution, please contact us.

^[1] Scoop.co.nz, “More Accessible Pay Equity Measures Come into Force”, November 2020