David Burton now leads the Employment Law Team at Mahony Horner Lawyers. David has written the below article appearing in Stuff:

The battle for pay equity has been waged since at least the 1950s.

Pay equity is about women and men receiving the same pay for doing jobs that are different, but of equal value.

This is recognising that jobs that require similar levels of skills, responsibility, and effort should be paid similarly.

Recent reports have shown the impact of pay inequities on retirement savings.

These reports show that there are important questions yet to be addressed on this discriminatory thorn in our society.

Certain occupations performed primarily by women have traditionally faced discrimination by way of lower wages.

This is distinct from equal pay, which is about ensuring men and women get the same pay for doing the same job. Equal pay is less of an issue in New Zealand now as it is much easier to enforce.

Pay equity, however, is a much more insidious issue.

The Equal Pay Act 1972 was introduced to try and address occupational pay discrimination. Amendments were made to the Act in 2020, modernising the claims process.

The Act now allows employees and unions to raise pay equity claims directly with an employer through a process similar to New Zealand’s bargaining framework.

A recent report from Te Ara Ahunga Ora Retirement Commission revealed that the gender wage gap persists into retirement.

It showed that women have 20% less in retirement savings than men, and illustrated that the gender wage gap has ongoing and long-lasting effects.

The organisation’s director of policy Dr Suzy Morrissey said the disparity was likely a reflection of the impact of the gender and ethnic pay gaps, time out of paid work, and more women than men working part-time.

This is important in the workplace for a number of reasons.

First, most working people in New Zealand contribute to a KiwiSaver scheme which is tied to their employment, where differences in income have an immense impact on the level of retirement savings.

When an industry is affected by historical and persisting discrimination, differences in pay can significantly limit one’s retirement savings.

The Ministry of Social Development notes that KiwiSaver is becoming the predominant retirement savings product for New Zealand, so these issues could become a real problem for the country’s campaign against gender inequity in the future.

Additionally, while employers contribute to the scheme, this does not extend to cover periods of paid parental leave.

Only 1% of paid parental leave is taken by men and New Zealand is one of only four countries that offers no parental leave specifically for men.

While partner’s leave is available, that is only for up to two weeks. Beyond that, the parents must decide who is the ‘primary carer’. The default position is that the mother is the primary carer, and therefore only she can take paid parental leave.

This leads to an extension of the gender pay gap as women tend to take on more of the parenting load, and reduce the time they can contribute to their KiwiSaver retirement schemes during their life.

Reports show that men indeed want to take more parental leave, but that the existing parental leave scheme leads to traditional patterns of men as the breadwinners and women as homemakers.

One way to address this disadvantage is by ensuring that the contributions for retirement are not affected by periods of parental leave.

However, on whom should this responsibility fall upon?

Should employers continue their contributions while women are on their parental leave? Or should the government cover KiwiSaver contributions during parental leave? Or should partners of parents taking parental leave be asked to share their contributions with the one taking the leave?

Under the pay equity process established in 2020, an employee or union may raise a pay equity claim with an employer or group of employers where they consider there is an ‘arguable’ claim that the work is predominately performed by female employees, and it is arguable the work is currently or has historically been undervalued.

The employer can then engage in bargaining where they agree the claim is arguable, or the claim proceeds to dispute resolution with the Employment Relations Authority having a larger role.

To argue a claim, claimants can use appropriate comparators.

This can include work performed by male comparators that is the same or substantially similar work or work performed by male comparators that is different but involves similar skills, responsibilities and effort.

In addition to that, it can also include any other comparator that the parties or the Authority consider relevant.

This last factor could be important in light of the disparities in retirement savings.

There is a chance that future pay equity claimants could raise disparities in KiwiSaver contributions as part of the comparative exercise, and say they receive less because of the KiwiSaver contributions they miss out on, if they take parental leave.

The pay equity scheme allows claimants and the Authority to consider any matters relevant to effecting the purpose of the scheme in alleviating pay inequity. It is not beyond reason that this is merely an area in which pay equity claims have yet to touch on.

The gender pay gap is an issue that we continue to learn more about. Its roots go deep and continue to affect employment relations in insidious ways.

The impact of it on retirement savings could become a new frontier in the campaign.

When our leaders talk about making our society fairer they should not ignore the issue that women and men should not be disadvantaged into retirement because they choose or have to work in an occupation that is haunted by gender or ethnic inequality issues.

While some of us might say this is tinkering around the edge of pay equality, others who are struggling with their rates, rents or bills in retirement because they chose to go into occupations such as nursing or aged care, would most likely have a different view.