Equal Pay Amendment Bill – what employers need to know

A Bill which seeks to prevent employers from paying their employees differently based on their sex, was introduced by the Government on 19th September 2018, National Suffrage Day. The Equal Pay Amendment Bill could also allow workers in female-dominated industries to make a pay equity claim within New Zealand’s existing bargaining framework, without having to go to court. 

Although the Bill is a proposal only and currently progressing through Parliament, employers need to understand the changes, if they are approved later down the line. 

What is the Equal Pay Amendment Bill? 

Currently, the New Zealand’s equal pay laws state that women and men should be paid the same for jobs of equal value, even if they are different. This is called pay equity.  

Under the existing Equal Pay Act 1972, employees wanting to make a claim, have done so through the courts. However, the Equal Pay Amendment Bill seeks to allow workers to make a pay equity claim within New Zealand’s existing bargaining framework.  

The Equal Pay Amendment Bill will make court action a last resort. Instead, employers, workers and unions will negotiate in good faith, with access to mediation and resolution services available if they are unable to agree. 

In summary, The Bill: 

  • Amends the Equal Pay Act 1972 to establish a process for pay equity claims, while still retaining the rights and processes for claimants to raise equal pay and unlawful discrimination claims;  

  • Prohibits differentiation based on sex in the rate of remuneration offered to employees for work that is predominately performed by women and has been historically or currently undervalued;  

  • Enables employees to raise claims relating to sex discrimination in employment;  

  • Sets out the process for resolving a pay equity claim that is simple and accessible;  

  • Permits the courts or the Employment Relations Authority (the Authority) to award an amount of back pay in a pay equity determination. 

What is the difference between Equal Pay and Pay Equity? 

Equal Pay claim 

Pay Equity claim 

Equal Pay for Equal Work addresses situations in which men and women do the same work. An employer must ensure there is no differentiation, on the basis of gender, between the pay offered and afforded by the employer to employees of the employer who perform the same, or substantially similar and work. 

Pay Equity is equal pay for work of equal value. An employer must ensure there is no differentiation between pay offered and afforded by the employer for work that is exclusively or predominantly performed by female employees and the rate of pay that would be paid to male employees. 

How could the changes affect your business?  

Should the Bill be accepted, employers need to be aware of the new process which makes it easier for employees to raise a pay equity claim.

If an employee or group of employees in a female-dominated workforce raise a pay equity claim for their occupation, based on historic or current undervaluation, the employer must: 

  1. Notify all their employees who perform or substantially similar work as the claimant within 20 days 

  2. Must decide within 65 days whether they agree in an arguable pay equity claim 

  3. If the claim cannot be resolved through a prescribed bargaining process under the Bill, or through mediation, the parties can apply to the Authority to have the claim decided. 

The Authority may also be able to order back pay, up to a maximum of six years. 

What next? 

The Equal Pay Amendment Bill is currently open to public submissions and has yet to be approved. If approved, the Act will come into force the day after it receives the Royal assent. 

For more information about the proposal or to discuss your business’s requirements, contact EQ Consultants’ on (03) 366 4034 or email info@eqconsultants.co.nz

This article is not intended as legal advice but is intended to alert you to current topics of interest.

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