Government developing pay gap calculator after Labour’s mandatory pay gap reporting pledge

Prime Minister Christopher Luxon with Acting Minister for Women Louise Upston. Photo / Mark Mitchell.

The Government is kicking for touch on Labour’s threat to make gender pay gap reporting mandatory for large companies but has developed a new tool for companies to use on a voluntary basis.

The new calculation tool, announced today by acting Minister for Women Louise Upston, will allow businesses to calculate their own gender pay gaps.

The national gender pay gap is 8.6 per cent, slightly narrower than in 2022 (9.2 per cent). Although it has reduced steadily from 16.3 per cent in 1998, it has stuck around 9 or 10 per cent for the past decade, except for 2015/2016 when it hit 12 per cent.

The previous Labour Government announced plans last year, before the election, to require public and private companies with more than 250 workers to publish a gender pay gap report.

Upston said Cabinet had not yet made a decision about progressing the previous government’s work on a mandatory pay gap reporting system.

The government was committed to addressing inequity in the workplace, Upston said, “but we also do not want to overburden businesses with unnecessary costs and regulations.”

Upston said the tool would help reduce the gender pay gap in New Zealand because it would make it easier for organisations to measure, understand, share and take action to close their gender pay gaps.

“The Ministry for Women will work with business leaders to agree on an easy-to-use approach to voluntary gender pay gap reporting that will see all businesses have access to the same measurement components to calculate their pay gaps.”

The gender pay gap is based on the difference in the hourly earnings of women and men. It has been an official statistic measured by Stats NZ since 1998. Stats NZ calculates the gender pay gap once a year and publishes the difference as a percentage form.

The difference in hourly pay is starker for Māori and Pacific women. Median hourly earnings for all women are currently $30.15 compared to $33.00 for all men.

As of September 2023, European women had median hourly earnings of $31.50 compared to $29.00 for Asian women, $28.29 for wāhine Māori and Pacific women earned $28.

Correction: An earlier version of this story stated the Government had dropped Labour’s mandatory pay gap reporting pledge. It has since been updated.

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.