Pay Equity New Zealand

Basic Summary

New Zealand has a proactive pay equity system, particularly for female-dominated occupations historically undervalued. The Equal Pay Act 1972 and Employment Relations Act 2000 provide the framework. The Pay Equity Process allows workers in female-dominated sectors to claim pay equity assessments against male-dominated comparators.

Key Legislation

Equal Pay Act 1972

Establishes the right to equal pay for the same or substantially similar work regardless of sex.

Employment Relations Act 2000

Provides mechanisms for:

• Collective bargaining on pay equity
• Pay equity claims process (Part 6A, added 2020)
• Good faith bargaining obligations

Public Service Act 2020

Requires public service employers to actively address pay equity issues.

Pay Equity Claims Process

Eligibility

Workers in female-dominated occupations can raise pay equity claims where they believe their work is undervalued due to historical gender-based undervaluation.

Female-dominated defined as:

• 60%+ women in the occupation, or
• Historical association with women (e.g., nursing, teaching, care work)

Steps in Pay Equity Process

1. Raise a Claim

Employee or union raises a pay equity claim with the employer, asserting:

• The work is undervalued
• Undervaluation is based on the work being performed predominantly by women

2. Employer Response

Employer must respond and engage in good faith to assess the claim.

3. Select Comparator Occupation

Identify a male-dominated comparator occupation of equal value based on:

• Skill: Qualifications, training, experience
• Responsibility: Accountability, decision-making
• Effort: Physical, mental, emotional demands
• Working conditions: Environment, stress, hazards

Comparators can be:

• Within the same employer
• In a similar sector or industry
• In a different sector if no suitable internal comparator exists

4. Assess Work Value

Use a gender-neutral job evaluation system to determine if the claimant's work is of equal value to the male comparator.

5. Determine Pay Equity Rate

If work is of equal value, establish a pay equity rate based on the comparator's pay, adjusted for legitimate factors like:

• Market rates (where appropriate and gender-neutral)
• Fiscal constraints (for public sector)
• Bargaining outcomes

6. Implement Pay Equity Settlement

• Negotiate pay adjustments through collective bargaining or individual agreements
• May include back pay (though not always required)
• Effective date and transition period agreed

Dispute Resolution

If parties cannot agree:

• Mediation through Employment Relations Authority (ERA)
• Determination by ERA or Employment Court
• Strict timelines apply

Key Pay Equity Settlements

Care and Support Workers (2017)

Kristine Bartlett case: Landmark settlement for aged care and disability support workers.

• Established the modern pay equity framework
• Significant wage increases (up to 50% for some workers)
• Phased implementation over several years

Teachers and Nurses

Ongoing pay equity reviews and settlements in education and health sectors.

Other Sectors

Claims raised in:

• Early childhood education
• Social and community services
• Allied health professions

Gender Pay Gap Reporting (Under Development)

New Zealand is developing mandatory gender pay gap reporting legislation:

Proposed requirements (not yet finalized):

• Employers with 250+ employees
• Annual reporting of mean and median gender pay gaps
• Public disclosure
• Action plans to reduce gaps

Timeline: Legislation expected in coming years; details subject to consultation.

Equal Pay Protections

Prohibited Discrimination

Employers cannot discriminate in pay based on:

• Sex
• Pregnancy and maternity
• Family status
• Sexual orientation
• Gender identity

Individual Claims

Employees can bring personal grievances for pay discrimination through:

• Mediation
• Employment Relations Authority
• Employment Court

Remedies: Back pay, compensation, reinstatement, penalties against employer.

Best Practices

For Employers

1. Proactive reviews: Conduct gender pay gap audits
2. Job evaluation: Use gender-neutral systems
3. Transparent pay structures: Clear criteria for pay decisions
4. Good faith engagement: Respond constructively to pay equity claims
5. Collective bargaining: Negotiate pay equity outcomes with unions

For Workers and Unions

1. Identify undervaluation: Gather evidence of historical undervaluation
2. Select comparators: Find male-dominated roles of equal value
3. Use job evaluation: Engage experts to assess work value
4. Bargain collectively: Stronger outcomes through collective claims
5. Seek support: Ministry of Business, Innovation & Employment (MBIE) provides guidance

Resources

• Employment New Zealand (MBIE): https://www.employment.govt.nz/workplace-policies/pay-equity/
• Pay Equity Taskforce: https://women.govt.nz/pay-equity
• Employment Relations Authority: https://www.era.govt.nz
• Employment Court: https://www.justice.govt.nz/courts/employment-court/
• Council of Trade Unions: https://union.org.nz

Compliance and Enforcement

Good Faith Obligations

Employers must engage in good faith when a pay equity claim is raised:

• Respond within reasonable timeframes
• Participate actively in the process
• Provide relevant information
• Consider claims on their merits

Penalties: Up to $50,000 for serious breaches of good faith obligations.

Public Sector Specific

Government departments and Crown entities have additional obligations:

• Proactively address pay equity
• Budget for pay equity settlements
• Report progress publicly

Timeline of Key Developments

Year	Development
1972	Equal Pay Act enacted
2015	Kristine Bartlett case reaches Court of Appeal
2017	Care and Support Workers Pay Equity Settlement
2020	Employment Relations (Pay Equity and Equal Pay) Amendment Act
2021+	Pay Equity Process in full effect; ongoing sector settlements

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Disclaimer: This guide is for informational purposes only and does not constitute legal advice.