MPs are developing policy that could mean compulsory public reporting on pay data, in order to help close the gap between men and women and different ethnic groups.
The education and work force committee has set itself a task of conducting a briefing into pay transparency, pulling together information on work that is already being undertaken on the subject.
Pay transparency means collecting data on pay rates from larger employers – without compromising individual privacy – so that pay gaps can be identified, assessed and addressed.
“Lots of other countries have done it,” said Camilla Belich, a first-term Labour list MP and committee member.
“It is something the community would like us to look at and not just one sector, and it is something the Government has said it is interested in doing something on.
“So I think it is for us a good piece of policy work to get our teeth into and hopefully provide something useful.”
They will be finalising their report early in 2022 and have every expectation that ministerial colleagues will turn it into legislation.
“If the Government was to put something in, you would hope it would be a uniquely New Zealand answer to this issue and so it might be that it includes ethnic pay gaps which I think have only been instituted in one or two other countries as well as the gender pay gap,” says Belich.
Marja Lubeck chairs the committee but is visiting family abroad for Christmas.
The submissions to the committee include a report by the Ministry for Women on the various transparency pay laws that are operating in countries such as Australia, Britain, Germany, Iceland and Denmark;the work of the Human Rights Commission on the ethnic pay gap; the views of unions and employer groups; and a proposed framework for a New Zealand law by Mind the Gap, a campaign supported by a wide range of groups.
Mind the Gap proposes that all businesses and non-Government organisations with 50 or more employees should be required to report their ethnic and gender pay gaps.
Based on 2020 data, that would mean 6024 New Zealand businesses would need to report, covering 58 per cent of private-sector employees, or 1,354,500 workers. And 360 charities employing almost 150,000 workers would also need to report.
It says each company and NGO should report on:
• gender pay gap;
• pay gaps for all Maori workers;
• pay gaps for Maori women;
• pay gaps for all Pacific workers;
• gaps for Pacific women employees;
• pay gaps for other ethnic groups, and ethnic women.
Mind the Gap cites Statistics NZ data showing the gender pay gap having remained at about 9 per cent to 10 per cent for the for the past decade. It says 20 per cent of the gap can be accounted for by way of differences in education, occupation choice, age, type of work and family responsibilities.
“The remaining 80 per cent cannot be easily explained other than by behaviour, attitudes, and assumptions about women in work including unconscious bias and discrimination,” its submissions says.
A Treasury analytical paper in 2018 about ethnic wage gaps pointed to data showing that the average hourly wage earned by Maori employees was 82 per cent of the hourly average Pakeha wage while the average wage of Pacific employees was 77 per cent of the average Pakeha wage.
There are mixed reports about whether the statutory requirements overseas for reporting pay have closed the gender pay gap in various countries.
Mind the Gap says gender pay gap reporting in Britain led to a reduction in the gap of 19 per cent. And Denmark reduced its pay gap too. But Business New Zealand pointed to the Danish experience of the gap being closed by decreasing men’s wages rather than increasing women’s wages.
Chartered Accountants Australia and New Zealand supports mandatory reporting using a single methodology over voluntary reporting saying it would remove any argument about how the gap is calculated.
“When an organisation’s pay gap is visible and transparent to investors, shareholders future talent, and employees, it drives action,” its submission said.
“There is a saying in business that ‘what gets measured gets done and what gets reported gets prioritised’.
“The adverse consequences of pay gaps should be front of mind for employers particularly in a tight labour market.”
Belich agrees. “If I was a company owner or a shareholder I would want to know is there a pay gap? Is there an ethnic pay gap, is there a gender pay gap in my staff, and the same for any chief executive or leader of any public organisation as well.”
A private member’s bill on pay transparency introduced by Green MP Jan Logie during the term of the last National government was defeated by 61 votes to 59.
Belich has a pay-related member’s bill in the ballot outlawing pay secrecy.
It would outlaw any employer taking disciplinary or adverse reaction to employees discussing their pay – no matter what it said in their employment contract.
“This is just their own personal information and there is a lot of power in sharing information.”
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