‘Don’t wait to be named and shamed’: Businesses urged to tackle gender pay gap now

New legislation that will require businesses to disclose their gender pay gap presents a real reputational risk for those not serious about tackling the issue, according to a chief executive.

Last week saw the official passing of the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023, which will require businesses with over 100 employees to disclose their gender pay gap to the Workplace Gender Equality Agency (WGEA).

The legislation, which will come into effect in 2024, covers approximately 40 per cent of the nation’s workforce, affecting private sector and Commonwealth public sector employers.

Commenting off the back of the passing, Sage CEO Dr Janin Bredehoeft urged businesses not to wait for the legislation to come into effect to enact change addressing their gender pay gap now.

“This legislation creates a real reputational risk for organisations that are not serious about tackling their gender pay gap. Don’t wait to be named and shamed. Use the next 12 months to review and improve your gender equity policies and practices,” she said.

“WGEA data from 2021–22 revealed that compared to the average gender pay gap of 22.8 per cent, the gender pay gap in tertiary education and scientific research services is relatively low at 7.7 per cent and 14.6 per cent, respectively, in favour of men. So while the higher education and research sector has made good progress, we cannot rest – we need to continue our work to better understand the causes of the gender pay gap in our sector and what works to reduce it.”

Ms Bredehoeft pointed to tools available for employers that will help them assess their gender pay gap. WGEA’s calculator and the WGEA Guide to Gender Equity are two resources worth exploring, she flagged.

“Despite having the tools available, we know that only 56 per cent of medical research institutes and 74 per cent of universities have conducted a remuneration analysis in the last two years​. Thirty-eight per cent of universities have a formal policy or strategy for a performance assessment process to ensure equal remuneration.

“One of the key drivers is usually occupational segregation, where women predominantly work in lower-paid roles, while men work in more highly paid management or technical roles. 

“Whatever your drivers may be, take targeted actions to address them, monitor the outcomes and review those actions if necessary.

“These actions could include making training and development opportunities accessible to all employees, particularly those who work part-time. Eliminate biases from your recruitment and promotion processes. Develop and follow a transparent policy for determining bonuses and other discretionary pay. These will go a long way to support employees on their career progression and close the gender pay gap.”

The bill was first introduced in February this year, aiming to encourage employers to help close Australia’s gender pay gap, which currently sits at 13.3 per cent.

At the time, Minister for Women Katy Gallagher said: “Women have waited long enough for the pay gap to close – let’s not wait another quarter of a century. On average, women working full-time can expect to earn 14.1 per cent less than men per week in their pay packets.”

“The gender pay gap is also holding our economy back with $51.8 billion a year lost when it comes to women’s pay. On current projections, it will take another 26 years to close the gender pay gap. The bill will also reduce red tape for businesses, making it easier to report.”

Prime Minister Anthony Albanese was quick to support the proposal, saying: “Women should be paid the same as men. It’s as simple as that. But right now, there’s not enough transparency around the gender pay gap in workplaces.

“That’s why we’re introducing a bill to fix that. It will mean companies with more than 100 staff need to report their pay gap publicly. And it will bring us a step closer to pay equity for women.”

Gender pay gap breakdown

According to research by WGEA, there are certain parts of Australia faring better than others when it comes to closing the gender pay gap.

Western Australia has the largest gender pay gap at 22.1 per cent, with men earning an average of $478.10 more weekly than women.

Queensland and the Northern Territory fare the next worst, holding gender pay gaps of 14.6 per cent and 14.2 per cent, respectively. This translates into Queensland-based women earning $272.50 less than Queensland-based men per week, and Northern Territory-based women earning $265.50 less than Northern Territory-based men per week.

Victoria is also holding a higher gender pay gap than the nationwide figure at 13.4 per cent, with Victorian women earning $253.90 less than Victorian men per week.

NSW has a gender pay gap of 11 per cent, with women in the state earning $208.20 less per week. Meanwhile, ACT’s gender pay gap is sitting at 10 per cent, with women here earning $211.50 less per week.

South Australia and Tasmania have the lowest reported gender pay gap at 7.8 per cent and 6 per cent, respectively.

Women in South Australia, on average, earn $132.30 less per week, and women in Tasmania earn $96.80 less per week.

WGEA director Mary Wooldridge said employers who don’t recognise gender pay gaps within their business are sending a clear message to female employees.

“As a business leader, if you are aware that your organisation has a gender pay gap and you take no action to close it, you are effectively sending a message to women that the work they do is of less value than that of men,” she explained.

“Employers and business leaders need to step up and take action to ensure the work of all their employees is valued and rewarded equitably.

“By closing Australia’s gender pay gap, we will improve the lives of Australian women, their families and communities and move closer towards the goal of being a world leader in gender equality.”