Red letter day for pay equity
The Government has announced a $2 billion package to address the pay inequity in the predominantly female aged-care sector.
The deal will see more than 55,000 workers receive a minimum pay rise of $4 an hour going up as much as $7 an hour in some cases.
The pay increase will cost the Government more than $2b over the next four years. For the workers, it won’t be backdated but will take effect on June 1.
While the deal only applies to aged-care workers, Health Minister Jonathan Coleman said it was the biggest pay settlement ‘‘in New Zealand history’’.
It was expected to have a flowon effect to other industries, and the Government hoped it would encourage business to make greater moves in addressing the overall gender pay gap.
Coleman said the ‘‘dedicated and predominantly female workforce’’ who were mostly on or about the minimum wage would receive a pay rise between around 15 and 50 per cent depending on their qualifications and/or experience.
‘‘For the 20,000 workers currently on the minimum wage of $15.75 per hour, it means on July 1 they will move to at least $19 per hour, a 21 per cent pay rise. For a fulltime worker, this means they will be taking home around an extra $100 a week, which is over $5000 a year.
‘‘For these 55,000 workers this funding boost will see wages increase to between $19 and $27 per hour over five years. Existing workers will be transitioned to positions on the new pay scale which reflect their skills, and their experience,’’ Coleman said.
The settlement would be funded through an increase of $1.856 billion to Vote Health and $192 million to ACC.
Coleman said ACC levies were already set for the coming years, ‘‘but may possibly increase over the next decade to support this’’. ‘‘However, that is not definite. There may also be an increase in costs for people in aged residential care facilities, whose assets keep them above the subsidy threshold.’’ That would be determined through the annual aged residential care contract negotiations.
Kristine Bartlett, an aged-care worker from Lower Hutt, argued in court that her employer Terranova was under-paying staff because of the high percentage of female employees.
A landmark Court of Appeal decision found women in predominantly female workforces could make a claim for pay equity under the Equal Pay Act.
In response, the Government set up a working group to develop principles for dealing with pay equity claims, and introducing legislation late last year that meant employees could file pay equity claims directly with their employer, rather than through the courts.
That was alongside two years of direct negotiations with unions, over a pay deal in the aged-care sector.
The unions involved – E Tu, the Nurses Organisation, the Public Service Association and the Council of Trade Unions – have welcomed the settlement.
Bartlett said it would make lives ‘‘worthwhile’’.
‘‘It will give us dignity and pride and make our lives worthwhile, knowing we’re being paid what we are actually worth. After years of struggling on low wages, hopefully we’re going to have a bit left over to actually enjoy life.’’
Tens of thousands of care and support workers would now vote on the proposed settlement in coming weeks.
E tu¯ assistant national secretary John Ryall said the offer, once ratified, would mean a ‘‘once in a lifetime pay rise which will end poverty wages for this mainly female workforce and set them on the path to a better life’’.
‘‘We’re delighted today’s proposed settlement recognises the justice of Kristine’s case and the wonderful work of Kristine and other professional carers.’’