Outsourced Payroll Specialists

Case Example: New Zealand Gender Pay Gap Legislation

The issue of the gender pay gap is one that we are familiar with here in the UK, as are many countries around the world. It refers to the difference in pay between male and female employees and remains in place in many industries. The UK government brought in measures in April 2017 to tackle the pay gap, requiring businesses of 250+ employees to report on pay differences in a database for everyone to access.

But some say these steps don’t go far enough in tackling the issue. Leading the way in solving the problem is New Zealand, and prime minister Jacinda Ardern.

The current pay gap position

In New Zealand, many occupations are female-dominated with more than 80% of the workforce female. And statistics show that these occupations tend to be lower paid while women are under-represented at the top paying, higher level jobs. There is also a lower recognition of the value that these employees bring to the company or their value not appropriately compared to other roles.

New campaign

Within a month of becoming the world’s youngest female prime minister at the age of 37, Jacinda Ardern set about making changes, pledging equity for women in the public sector within a four-year period.

Her aim is to make New Zealand a champion on issues of the gender pay gap and promoting pay equity. And while New Zealand may only be a country of 5 million people, their aim is to showcase to the rest of the world what can be done to improve the situation.

Improving position

Already the efforts have had a positive effect. Figures released in August showed that the pay gap was closing and had reached just 9.2%, the second-lowest that it has been for around 20 years. It reached 9.1% in 2012 and last year the figure was 9.4%.

Another statistic found that while the hourly earnings for both genders had increased, female wages had risen by 3.2% while men had only risen by 2.9%. The gender pay gap is the smallest for people under 30 at 0.9% while those between 50-54 will see the largest potential gap between men and women at 4.2%. The youngest workers between 15-19 see 2.4% difference in wages.

Reducing the pay gap globally

Steps taken by New Zealand to improve the situation have also seen change in other parts of the world. In Australia, gender pay gaps are typically around 15% but in the public sector they have made improvements and the figure is now 10.8%. There are also more women in leadership positions as well as on government boards.

Here in the UK, we have varying gender pay gap figures depending on the industry. Eight years after gender equality laws were introduced, there is a gap of around 9.7% across the country. In public sector organisations, 9 out of 10 men are paid more than women with a gap of 14%. Some industries had a much worse position – the largest was in the construction industry with a difference of 25% followed by 22% in finance and insurance, and 20% in education.

Figures show the UK still has a long way to go but by following the lead of New Zealand and their female prime minister, there’s no reason we can’t get there.

For advice on how to avoid your company falling into the pay gap, contract Trace Payroll. We offer a variety of payroll services to help your business and can provide the reporting tools you need to meet the government’s requirements.

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