The Equal Pay Amendment Bill, which amends New Zealand’s Equal Pay Act 1972, clarifies obligations on employers to prevent gender discrimination and introduces a new process for employees or their union(s) to raise ‘pay equity claims’. The Bill will come into force in three months.

Employer Obligations

The Bill provides that employers must comply with two duties to prevent pay discrimination:

• Employers must ensure there is no differentiation on the basis of sex between pay rates for employees performing the same or substantially similar work (an equal pay claim); and
• Employers must ensure there is no differentiation between the pay rates of male and female employees for work which is exclusively or predominantly performed by female employees where the employees have the same or substantially similar skills, responsibility and experience, working under the same or substantially similar conditions with the same or substantially similar degrees of effort (a pay equity claim).

New Process

The Bill sets out a special process for raising pay equity claims.

Pay equity ‘claimants’ may be either an individual employee, a union acting on behalf of its members who perform the same or substantially similar work for the employer, or multiple unions acting on behalf of their respective members.

Claimants must raise pay equity claims in writing and must briefly set out the information relied on in support of the claim being ‘arguable’. The Bill provides a pay equity claim is ‘arguable’ if it relates to work that is or was predominantly performed by female employees, and it is arguable that the work is currently undervalued or has been historically undervalued. The Bill states this threshold for raising a claim is ‘low’.

As soon as reasonably practicable, but not later than 45 days after receiving the pay equity claim, the employer must decide whether in its view the pay equity claim is arguable (which does not mean that the employer agrees that there is a pay equity issue, or that there will be a settlement).

If the employer considers the claim is not arguable, it must explain the reasons for that decision to the claimant. The claimant may then refer the issue to mediation and/or seek a determination from the Employment Relations Authority that the claim is arguable.

If the employer considers the claim is arguable, the claimant must be notified of this. The claimant and the employer then enter into good faith bargaining to resolve the claim through a pay equity settlement.