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Frequently Asked Questions About Pay and Employment Equity
Why is there still a gender pay gap?
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The three key factors that are still affecting pay and employment equity are:
- the position of women in the workforce occupations and job levels
- the valuing of jobs some skills are overlooked and some have a low value placed on them
- e relationship between the structure of paid work and women’s job choices and progression, especially relating to family responsibilities.
Some of the specific issues are the concentration of women and men in different occupations, pay setting processes, access to formal and informal career paths and management positions, part-time work, family responsibilities, education and training and workplace cultures.
What is employment equity?
Employment equity is about fairness at work. It means identifying and removing the barriers that prevent women from having equal opportunity to participate fully in employment.
Almost half the women workers in New Zealand are in occupations that are more than 70% female, and the female-dominated occupations tend to be lower paid. Women are still under-represented in higher-level jobs.
In March 2007, 52% of employed women were employed part-time, compared with 18% of employed men. Women make up 72% of all part- time workers. [1]
What is pay equity?
Pay equity means gender doesn’t affect what people are paid. It means women receive the same pay as men for doing the same work, and for doing work that is different, but of equal value. The value of work is assessed in terms of skills, knowledge, responsibility, effort, and working conditions. Other considerations in setting remuneration can include market factors, productivity and performance.
In March 2007 women earned 78.9% of men’s average weekly earnings, and 86.7% of men’s average hourly earnings. [2]
How are female-dominated and male-dominated occupations defined and what are these definitions based on?
An occupation is considered to be female-dominated when 70% or more of those in that occupation are women. An occupation is considered to be male-dominated when 60% or more of those in that occupation are men. These thresholds are widely accepted internationally. These thresholds are set at a level that provides some statistical certainty that the occupation is indeed predominantly female or predominantly male, and the gender predominance is not the result of passing or random factors. Endnote 2 in the Pay and Employment Equity Review Workbook includes a fuller explanation.
Why is the focus on gender rather than all employment equity matters?
The Government has specifically mandated the Pay and Employment Equity Plan of Action to see that women’s job opportunities and pay are not affected by gender. There is a clear history of women’s opportunities and pay being specifically set according to gender. For example, until relatively recently separate rates of pay were set for men and women, and women were excluded from certain types of work. While the introduction of equal pay and anti-discrimination legislation led to improvements in women’s pay rates there is evidence that this has now levelled off. Current data shows that women’s earnings are still less than men’s and that women are in different types and levels of jobs.
Both men’s and women’s experiences of employment can be affected by gender. While women’s earnings may be lower, men may be allowed less employment flexibility and expected to work longer hours. The opportunities and treatment of men and women workers are closely interrelated. Men and women cannot make the choices they want about how they share paid and unpaid work while gender affects employment. Pay and employment equity cannot be achieved for women or men unless the ways gender is affecting employment are identified and addressed.
What is job evaluation?
Job evaluation is a systematic process to establish the ‘size’ of a job relative to others.
Although job evaluation schemes do not determine rates of pay, they are used in remuneration to provide a clear and fair measure of relative value or ‘size’ of jobs within and across organisations.
Job evaluation has been found to be affected by gender bias that is often unintentional. Research and cases around the world have found that gender bias can occur in any stage of the process involved in describing, analysing and evaluating jobs.
The Pay and Employment Equity Unit has developed an Equitable Job Evaluation System comprising a factor plan, User’s Guide, job information questionnaire and education and training modules. The Unit has also developed a Service Sector Skills Identification tool to assist with identifying, valuing and measuring skills in service jobs.
How does New Zealand compare internationally?
While the size of the gender pay gap varies, the fact that men earn higher hourly rates of pay than women is an international issue. For example in the European Union member states, women’s gross hourly earnings are on average 15% less than men’s, with the gender gap ranging from 4% to 24% .
Compared to other OECD countries, New Zealand has a relatively high level of concentration of women workers in female-dominated occupations, with 47% of women working in occupations where 70% or more of employees are women.[3]
How does pay and employment equity affect productivity?
Research from the United Kingdom and Canada shows that employers who carry out pay and employment equity reviews report improved transparency and understanding of the organisation’s work, of who is doing it and of the rewards they are getting.
Employers and employees value fair pay systems and equitable opportunities. When people go into the jobs they are best suited to, and are fairly treated and rewarded for their productivity without gender playing a part, the labour market functions better. When rates for female-dominated jobs are too low, it’s hard to attract and retain people who would be suited to them, want to do them and want to stay in them. Pay and employment equity can improve the supply and the skill level of labour. Having broader recruitment pools and employment practices unaffected by gender can upgrade workforce quality and productivity and help employers attract and retain the people their organisation needs.
What could the impacts of pay and employment equity be?
Pay and employment equity can help women to improve their economic independence and their ability to build household income. It can reduce reliance on income support, and improve lifetime earnings and retirement incomes. It may give women more capacity to contribute to retirement incomes and to tax, and improve their ability to pay off student loans earlier. It could enable women and men to make choices about their commitments to paid work and other responsibilities without gender pre-determining their choices.
Better pay and conditions can improve the incentives to enter and remain in paid work. Increasing labour force participation of women can help meet shortages of labour and skills and contribute to economic growth. Improved workforce participation of women generates a better level of return on the increasing investment in women’s education. More workforce experience improves women’s prospects of getting higher-level jobs (where they are still under-represented).
What is the Government doing about pay and employment equity?
Making a real impact needs strong government leadership and a proactive approach by employers, unions and employees to identify and remedy pay and employment equity shortfalls in workplaces. The Government has taken on that leadership and has provided resources to assist organisations to continue to put pay and employment equity into effect.
In 2004, the Government made a clear commitment to the Five Year Pay and Employment Equity Plan of Action. The objective is that remuneration, job choice and job opportunities in those sectors are not affected by gender. The Government has commitments and obligations under national and international legislation and conventions on pay and employment equity. These conventions and laws recognise the fundamental human rights of women and men to equality of opportunity and equality of treatment. There has been equal pay legislation in the state sector since 1960 the Government Service Equal Pay Act, and for all employees since 1972, the Equal Pay Act. In addition, the Employment Relations Act, 2000, the Human Rights Act, 1993, the State Sector Act, 1988 and the Crown Entities Act, 2004 include provisions relating to pay and employment equity and/or discrimination in employment.
The Contestable Fund is an annual fund of $1 million. In phase one it is available to the Public Service and the public education and public health employers and relevant unions to undertake specific projects to support pay and employment equity processes. The fund is a contribution towards the costs of activities that facilitate the development of durable and equitable pay and employment equity conditions.
Who is covered by the Plan of Action?
The first phase of the Plan of Action covers the Public Service and the public health and public education sectors. In 2006 there were over 210,000 employees in these sectors. In the Public Service, women made up 59.4% of employees, across 38 agencies. In the public health sector, which includes the 21 district health boards and the New Zealand Blood Service, women made up 80% of employees. The public education sector includes employees in kindergartens, state and state-integrated schools, the Correspondence School, and tertiary education institutions. More than twice as many women as men are employed in the education sector.
In 2006 the gender pay gap[4] for each sector was:
• 16% in the Public Service [5]
• 35% in the health sector [6]
• 11% in primary education, 6% in secondary education and 22.2% in the tertiary sector [7]
The second phase of the Plan of Action covers Crown agents, Crown entities, state-owned enterprises and local government organisations and a programme to develop a pay and employment equity responsible contracting policy for outsourced Government services.
How will pay and employment equity be achieved here?
Sector leaders in partnership with employers, unions and employees to review their organisations against three key indicators:
• Whether women and men have an equitable share of rewards
• Whether women and men participate equitably in all areas of the organisation
• Whether women and men are treated with equal respect and fairness.
The reviews will provide a stock take of the work women and men are doing, and their employment rewards, conditions, arrangements and experiences. A workbook has been developed to guide the review process. Pay and employment equity will be achieved by organisations implementing the recommendations of the stock take and by embedding equitable employment practices into the life of the organisation.
Review committees will report on the review findings and develop response plans. The response plans may recommend immediate actions and they may identify a need to investigate the pay for a female-dominated occupation. The target group for pay investigations is occupations that are at least 70% female or were at least 70% female when equal pay was introduced. Response plans may also recommend the development or review of employment policies, systems and practices to ensure fair treatment and the removal of barriers to full participation.
Pay investigations will cover job size and any other factors affecting remuneration, including matching to market, performance pay and productivity pay. A report on the investigation will be provided to employers and unions and may be the subject of bargaining. Any additional funding bids will be considered within existing budget processes, advised by a tripartite process. Claims will need to be supported by a business case establishing clear evidence that there is pay inequity, preferably based on a rigorous pay investigation, whether organisations can fund the claim through re-prioritisation and how relativities based claims will be managed. See Fact Sheet 8: Pay Investigations for further information.
The other key process is the Equitable Job Evaluation System, for use in collecting job information about and evaluating female-dominated occupations to support a pay investigation. Equitable Job Evaluation has been designed to ensure that the full range and levels of skills, knowledge, responsibility, effort and working conditions in the female-dominated occupations are identified and valued.
Equitable Job Evaluation is to be used in pay investigations. If employers and unions agree another job evaluation system that meets the Standards New Zealand Gender-inclusive Job Evaluation Standard (P8007/2006) may be used. The same system must be used to analyse both the target and the comparator occupational groups.
The Service Sector Skills Identification tool facilitates a better understanding of the skills used in service sector work and the contribution of those skills to effective job performance. Better understanding of the skills used can contribute to a range of human resource management processes, including recruitment, job evaluation, training and development of career paths, work processes and classification design.
What do pay and employment equity review committee members do?
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The review committee is made up of employer, employee and union representatives who:
- work collaboratively to undertake the review
- evaluate a comprehensive array of quantitative and qualitative information to identify gender inequities
- report progress and encourage engagement regularly from staff and management
- determine the conclusions and priorities for response to be included in the review report and response plan
- meet about eight times and consult with others between meetings
- present the review report and response plan to the chief executive.
What do project managers do?
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The project manager may be a seconded staff member or an external consultant. The project manager supports the review committee by:
- drafting the project plan for the review
- developing and implementing the communications strategy, with the committee
- co-ordinating the collection and interpretation of the data
- recording the committee’s deliberations
- drafting the review report and response plan.
Who monitors the progress of pay and employment equity?
The Government has established arrangements for ensuring that chief executives and sector leaders, the Ministry of Education, the Ministry of Health and the State Services Commission in phase one, take responsibility for implementing the Plan of Action. Sector leaders make six-monthly progress reports to their Ministers.
The accountabilities are to be included in the documents relevant to each sector, including Statements of Intent, letters of expectation to district health boards, tertiary education institutions’ profiles and the National Administration Guidelines for school boards of trustees. The Pay and Employment Equity Chief Executives’ Committee chaired by the Secretary of Labour is monitoring progress against the accountabilities.
What is the Pay and Employment Equity Steering Group?
A tripartite steering group has been established to lead the ongoing development of the Plan of Action and to monitor and report on its implementation. The Steering Group draws on the practical experience of unions and employers in the three sectors and guides the work of the Pay and Employment Equity Unit.
What is the Pay and Employment Equity Unit?
The Unit is a team in the Department of Labour, working to meet the Government’s commitment to pay and employment equity. It develops tools, associated processes, information resources and provides training and advisory services. The Unit also monitors and reports on pay and employment equity progress, and contributes to the ongoing development of the Plan of Action. Its work programme is based on the Pay and Employment Equity Plan of Action.
Further information and guidance
We welcome the opportunity to help you further. We value your query and will respond to you as quickly as possible. You can contact us by :
Phone: +64 4 915 4487
Email: equity@dol.govt.nz
Download this fact sheet as a PDF [85kb, 8 pages]
Download this fact sheet as a Word document [198kb, 10 pages]
[1] Statistics New Zealand Quarterly Employment Survey March 2007
[2] Statistics New Zealand Quarterly Employment Survey March 2007
[3] European Commission 2007 Report on Equality between Women and Men
[4] Gender pay gap defined as a difference between average salary of women and average salary of men and expressed as a % of average salary of men
[5] SSC November 2006, Human Resources Capability Survey of Public Service Departments as at June 2006
[6] Statistics New Zealand, 2006, Quarterly Employment Survey data
[7] Primary and secondary data MoE, 2007, Teachers Payroll Data Warehouse, Demographic and Statistical Analysis Unit