Government begins work on pay transparency regime, which could force companies to publish pay gap data

Minister for Women Jan Tinetti will shortly begin work on encouraging pay transparency. Photo / Stuart Whitaker.

Businesses may soon be forced to publicly disclose the extent of their gender pay gaps and publish starting salaries in job ads thanks to a Government pay transparency regime.

Minister for Women, Jan Tinetti, and the Minister of Workplace Relations and Safety, Michael Wood, confirmed they are about to begin a work programme to improve the level of pay transparency in New Zealand.

The programme is in response to a select committee briefing on pay transparency, which was delivered to Parliament last week.

The Education and Workforce Committee recommended "the Government develop pay transparency measures" in line with its report. These measures would attempt to achieve pay equity by lifting lower wages (lowering wages to achieve equity should be banned, the committee said).

It suggested mandatory reporting of gender pay gaps, and potentially enforcing the publication of starting salaries in job advertisements.

Tinetti told the Herald she and Wood had "agreed to work closely on the pay transparency work", and that "planning for the work will begin shortly".

The recommendations of the committee "will feed into this work once it begins".

She would not say when the work would begin or when it would finish and when the public is likely to see some policy.

"The Government is committed to exploring ways of improving pay transparency in New Zealand," Tinetti said.

"Pay transparency is an important issue for women's economic and employment equality," she said.

One relatively new transparency regime in the United Kingdom requires public, private, and voluntary organisations with more than 250 employees to publish annual information on their gender pay gaps through a Government reporting service. Organisations with fewer than 250 employees can report voluntarily

According to Stats NZ, the gender pay gap has fallen from over 15 per cent in 1998 to just under 10 per cent now. It has remained roughly level since 2017.

There have been two recent attempts at implementing a pay transparency regime. In 2017, a member's bill from Green MP Jan Logie was drawn. That bill would have amended the Equal Pay Act 1972 to create a pay transparency regime, but failed at its first reading by one vote.

Submitters on recent pay equity legislation called for pay transparency to be included in that bill. It was not, but Ministers did seek further advice on a regime.

The National Party did not back the select committee's recommendations, though MPs said they supported closing the pay gap.

In a minority report, National said it did not support "a mandatory and broad pay transparency regime".

The party said while large companies could generate pay data, smaller firms would struggle.

"We do not think this is the time to be adding additional mandatory requirements on those businesses," the party said.

National also warned of unintended consequences from a mandatory and broad regime.

"[T]here is research that pay transparency mandates are likely to make employers reluctant to grant individual salary increases, lest they force a pay increase for everyone across the board," National said.