Transparency could close gap
Forcing employers to report on gender pay gaps could slash unexplained differences in pay by up to 40%, increasing the average woman’s weekly pay by just over $35 a week, says non-profit organisation MindTheGap.
Stats NZ estimated last year that the median average hourly pay of women was 9.1% lower than that of men, a statistic that it said was little changed over five years.
MindTheGap publishes an online register listing dozens of employers that have voluntarily agreed to publish information on pay gaps, linking to their reports.
But the organisation said a review of evidence overseas suggested mandatory reporting would be more effective.
All employers with more than 50 staff should be required to publish information on the pay gaps that exist between their employees of different genders and ethnicities, it said yesterday.
Such a change may already be in train. Parliament’s Education and Workforce select committee has been investigating pay transparency and in March recommended a ‘‘comprehensive pay transparency regime’’ that would require action by employers above a certain size to address inequities.
Its report also concluded that voluntary compliance was less effective than regimes in which ‘‘reporting and implementation are strictly enforced’’.
The select committee separately recommended that it should be compulsory for employers to publish starting salaries when advertising jobs, to help address an ‘‘information imbalance’’ between employers and potential employees.
MindTheGap’s new research is based on a review of overseas literature from countries including Canada, Norway, Denmark, Britain and France where pay transparency regimes are in place.
That research suggested mandatory reporting reduced gender pay gaps by between 20% and 40%, particularly benefiting women on lower incomes, it said.
That was the reduction in the gender pay gap that one research paper estimated had occurred at universities in Canada, following law changes.
A British study estimated mandatory reporting for employers with more than 250 staff had reduced the gender pay gap there by 19%, which equated to a 1.6 percentage point increase in women’s hourly wages relative to men.
MindTheGap estimated mandatory reporting might boost the pay of those on the women’s median wage of $26.37 an hour by between $12.90 and $35.77 a week, though it acknowledged there were many unknowns.