Revealing pay rates will help close NZ's pay gap, says commissioner

Wednesday, 1 July 2020

The Equal Employment Opportunities Commissioner has personal experience of being paid less for equal work, which was a $40,000 lesson for her.

Saunoamaali'i Dr Karanina Sumeo discovered at a previous job that her pay was much less than it was for a very similar role, and decided to fight to be paid at the same rate.

'I was able to take it up with my manager, and not everyone has the confidence to do that,' Sumeo said.

'Then it took many months because it had to go HR, to the unions, and I just held on in there. That had a huge impact on my ability to provide for my kids.'

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The commission, which began advocating for pay transparency early last year, is hoping to ramp up pressure on the Government to introduce legislation about pay transparency.

Including it in the Equal Pay Amendment Bill was not possible as the Education and Workforce Select Committee did not include recommending a provision for pay transparency.

The commission asked Research New Zealand to do a survey in February and March this year about people's opinions and experiences of unequal pay and pay transparency.

Forty-four per cent of people surveyed reported being paid less for doing the same job as another person, and most of those found out when they were told by a work colleague.

Their level of experience was given by 48 per cent of people as the most common reason for lower pay, but other reasons were age, gender, and ethnicity.

Most people who were paid less did not complain, while about one fifth left their employer.

Just under two-thirds of respondents were told how much they would be paid before they accepted a new job, but in most cases it was either during the job interview or when they were offered the job.

'I was also really surprised in terms of the number of [job applicants] who negotiated pay is really, really low - about a quarter of the population,' she said.

'Even among males it was so low - that was something I did not expect to see, because I think there's this common opinion that men are much better at negotiating than women.'

People did not complain if they did not want to upset their manager, or felt it was rude, or did not feel it was their right to challenge what they were being paid, the survey showed.

'One of the things that popped out of this study is some people found out that they weren't paid the same for the same job, but they didn't necessarily recognise it as against the law, it just felt unfair,' Sumeo said.

Employment lawyer Peter Cullen said without pay transparency it could be difficult when trying to determine if you had a pay equity claim.

Contracts with clauses to prevent the discussion of employee remuneration were common in small businesses and at senior management level.

However, once a business hit a certain size, there tended to be a collective agreement that laid out different pay bands, Cullen said.

The commission wanted employers to be required by law to make their pay rates for jobs public.

'The majority of people don't even know what their job is worth until they actually made it to the interview stage.'

That created a power imbalance and a bargaining advantage for employers, she said.

'One of the basic things you can do is just publish how much the job is worth in the ad, but that's seen as a real threat by some employers.'

Jeremy Wade, Head of Trade Me Jobs, said 8.5 per cent of job listings on the site on Wednesday included the salary in the ad.

The sectors most likely to include salary information were sales; construction and roading; and education. Those least likely to include that information were marketing, media and communications; legal; and technology.

“Often employers want to find out as much as they can about a potential candidate before revealing details about the salary and other benefits,” Wade said.

“In some sectors like IT, salaries are essential in attracting talent. Employers may be more likely to negotiate salaries and benefits for the best candidates, so it’s best for them to hide pay initially.”

HOW TO CLIMB THAT LADDER

One finding in the research was how people with disabilities missed out on promotions, not because of their disability but because they did not have a relationship with the people making the decision about who will go forward.

'If you're not going to get to the next level unless you have a good friendship with the boss, then that's a problem.'

The commission said it was up to businesses to design a system so workers understood what they needed to do in order to climb the rungs, and so decisions were made consistently on who was promoted.

'We're not asking to publicise everyone's name and everyone's salary - we're wanting to know what the roles are and what people can do to climb that ladder.'

Casino operator Sky City was one of the companies supporting the commission's campaign. Its CEO, Graeme Stephens, regularly reviewed managerial positions in terms of diversity and would ask questions if everyone promoted was a man, for example.

'There has to be an active commitment right from the top, not just left to the HR part of our companies to deal with it,' said Sumeo.

Average hourly wages for Europeans of $26.85 were well above those for Asians ($24.00), Māori ($23.00), and Pacific people ($22.38).

Disabled people earned significantly less than non-disabled people, with average hourly wages of $23.42 and $25.57, respectively.

'We want a law change, but we want businesses together with Government and the unions to come up with the mechanism,' she said.