Pay equity refers to equal pay for work of equal or comparable value. Equal pay is not just about equal wages. Equal pay takes into account discretionary pay, allowances, performance payments, merit payments, bonus payments and superannuation. Unequal pay is just one of the many drivers of the gender pay gap.
What is 'equal pay'?
Equal Pay
Equal Pay is when men and women receive equal pay for work of equal or comparable value. In practical terms, this means that:
- men and women performing the same work are paid the same amount
- men and women performing different work of equal or comparable value are paid the same amount.
Equal pay is not just about equal wages. Equal pay takes into account discretionary pay, allowances, performance payments, merit payments, bonus payments and superannuation.
Organisations that are committed to equal pay will ensure that:
- the wages and conditions of jobs are assessed in a non-discriminatory way. This is done by valuing skills, responsibilities and working conditions in each job or job type (even where the work itself is different) and then remunerating employees accordingly
- the workplace's organisational structures and processes do not impede female employees' access to work-based training, promotions or flexible working arrangements.
Unequal pay is just one of the many drivers of the gender pay gap.
Latest statistics
These are the current statistics on pay equity in Australian workplaces:
of orgs analysed their pay data for gaps
of orgs took action to close the identified gaps
of orgs reported pay metrics to executive
Legal requirements
Organisations are required by law to provide equal pay to employees who are performing work of equal or comparable value. It is important that organisations meet their legal obligations, as failure to do so may result in the organisation and individuals being exposed to a range of legal claims.
The Fair Work Act 2009
Australian legislation protects people from being discriminated on the basis of sex.
The rules and obligations for employees and employers are outlined within the Fair Work Act (2009) which is the primary piece of legislation governing Australia’s workplaces. It is the foundation to all standards and regulations for employment and something that employers in all industries and within all business sizes should be familiar with.
Where pay disparities exist in a workplace, The Fair Work Commission can make an equal remuneration order requiring certain employees be provided equal remuneration for work of equal or comparable value. An application for an equal remuneration order can be made by an affected employee, a union which is entitled to represent an affected employee, or the Sex Discrimination Commissioner.
For more information go to the Gender pay equity section on the Fair Work Ombudsman’s website. You may also wish to view our guides on managing the legal risks of pay equity below.
How it happens within organisations
Achieving gender equality, including gender pay equity, is a process that takes time and conscious effort. Gender pay equity is about ensuring women and men performing the same role are paid the same amount, and women and men performing different work of equal or comparable value are paid equitably. This requires a valuing of skills, responsibilities and working conditions in a non-discriminatory way.
In every occupational category, there is a gender pay gap favouring full-time working men over full-time working women. Technicians and trades workers and community and personal service workers have some of the highest gender pay gaps. Clerical and administrative workers and machinery operators and drivers have some of the lowest gender pay gaps. Causes of occupational gender pay gaps include women and men working in different types of organisations, a lack of women in more senior or high-paid roles within occupational categories, and discrimination.
Unintended gender biases in hiring, promotion, performance and pay decisions can lead to incidences of pay inequity. Any unfairness or perceived unfairness can negatively impact workplace productivity, employee engagement and morale, access to talent, and retention. That’s why reviewing the results of a comprehensive gender pay equity audit and developing a pay equity action plan is a feature of best practice talent management, while also providing a valuable insight into your gender diversity performance.
Pay gaps that occur within organisations
The WGEA encourages organisations to analyse their own pay data in different ways to uncover different pay equity issues and take action at all levels of the organisation. The Agency has developed a variety of resources to help employers undertake a pay gap analysis and address gender pay gaps in their organisations.
Like-for-like gaps | Pay gaps between women and men undertaking work of equal or comparable value (comparing jobs at the same performance standard), for example, comparing two senior engineers in the same organisation. |
By-level gaps | Pay gaps between women and men doing the same or comparable work (comparing responsibilities, typically the same level in the organisational hierarchy), for example, comparing individuals within groupings of levels such as Key Management Personnel, managers, professionals. |
Organisation-wide (or department-wide) | Gender pay gap which is the difference between the average remuneration of women and the average remuneration of men across the whole organisation (or department). |
Actions organisations can take to address pay equity issues
We encourage organisations to diagnose the status of pay equity within their workplace, set goals, and take practical steps to improve pay equity as part of their gender equality strategy. Below is a summary of actions an organisation can take to improve pay equity.
Guide to gender pay equity
These steps have been pulled from our comprehensive Guide to gender pay equity. For more in depth information on each of these steps, please review this guide.
Build awareness and understanding
We recommend organisations get familiar with the key concepts and issues surrounding pay equity and equal pay. It is important to understand the 'what' and 'why' before getting to the 'how'.
A good starting place is this website and the range of resources we have on this issue.
Develop a business case
To achieve internal support, organisations need to be able to quantify and communicate why addressing pay equity (and gender equality more broadly) is going to be beneficial for their workplace and business.
Gain leadership commitment
Leadership commitment on pay equity can emerge in one of two ways:
- top down: commitment may already exist at the board, CEO or leadership team level and human resources is called on to act
- bottom up: human resources may raise pay equity as an issue with the leadership team or CEO, sparking a commitment to investigate further.
Pay Equity for CEOs
Six ways to demonstrate your leadership:
- Commit to the end-to-end process of addressing pay equity.
- Role model the removal of biases during the performance management process and the annual remuneration review.
- Role model the removal of biases around part-time work and flexible working arrangements.
- Actively communicate internally and externally on the importance of ensuring equal remuneration between women and men.
- Hold management to account on addressing any pay equity issues and removing bias in pay and performance decisions.
- Remove the roadblocks for your HR team to address pay equity issues.
Six immediate actions to take:
- Take ownership of pay equity.
- Place pay equity on the next executive team agenda.
- Request your HR team conduct a pay equity analysis and report back to you.
- Direct your HR team to the “Addressing pay equity” WGEA page.
- Commit to developing an action plan to address any gender pay gaps identified.
- Include metrics on gender pay equity in your report to the Board.
Five red flags to look out for:
- No gender pay gap analyses are conducted.
- Your team tells you ‘there are no gender pay gaps’.
- Remuneration policies and procedures do not specifically address pay equity.
- Inadequate (or no) action has been taken to address pay inequities.
- Gender pay gaps are ‘explained’ but not investigated and ‘justified’.
Pay Equity for Directors
Ten questions directors should ask:
- How often is a pay equity analysis conducted?
- What are the key findings and actions arising from the data analysis?
- What pay equity indicators can be reported to the board?
- What are the findings of the annual performance review analysis by gender?
- How do diversity and remuneration policies address pay equity?
- Is there a pay equity strategy and action plan to address any pay equity issues?
- What progress has been made on addressing pay equity issues?
- What are the key barriers inhibiting progress on pay equity?
- How is the CEO held accountable for pay equity?
- What is the process for ongoing monitoring of pay equity in the company?
Five red flags to look out for:
- Senior management is unaware of the issue of pay equity.
- No gender pay gap analyses are conducted.
- Negative employee perceptions about fairness in engagement surveys.
- Remuneration policies and procedures do not specifically address pay equity.
- Inadequate (or no) action taken to address pay inequities.
Pay Equity for Managers
Gender pay gaps: checklist for managers
The following checklist outlines actions individual managers can take to ensure they are actively involved in the removal of gender bias from pay and performance decisions
When | Action |
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Overall |
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At time of commencement |
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At the time of promotion |
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As part of the performance management process |
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Remuneration decisions |
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Identify and analyse pay gaps
A critical step in taking action to address and improve pay equity in your organisation is to review the data, identify any instances of unequal pay and understand what is driving any gender pay gaps. The more detailed your analysis, the more you will be able to tailor a strategy and action plan to address your organisation’s specific issues.
WGEA Gender Pay Gap Calculator
We have developed a gender pay gap calculator to assist organisations to identify and analyse the causes of the various types of organisational gender pay gaps.
Note: The calculator is an excel workbook (.xlsb file) and you will require Microsoft Excel in order to open it. You may also need to enable macros.
Strategy and action
When that the problem is understood and diagnosed, your organisation will be in a position to strategise and take action. For detailed list of potential actions, please check out the Guide to gender pay equity.
Examples of actions
Ensure your organisation carries out job evaluations and grading processes in a gender-inclusive way. See our Guide to Australian standards on gender-inclusive job evaluation.
Embed gender pay equity into your organisation's remuneration policy (or create one from scratch if your organisation does not have one). See our Quick guide to designing an equitable remuneration policy.
Review, refine and report
It is important to track progress against the goals and targets set. From there, you will know whether any areas require refinement. Pay equity is something organisations need to maintain, monitor and continually improve on.
Video resources
Latest news
This year marks 50 years since the landmark 1969 equal pay decision that first saw Australian women win the right to be paid the same as men for doing the same work, or work of equal or comparable value.
More employers than ever recognise the importance of looking at their own data when seeking to improve gender equality within their four walls. Workplace Gender Equality Agency (‘WGEA’) data showed that in 2018, 40% of organisations conducted a gender pay gap analysis.
This year’s WGEA data shows that year-on-year the gender pay gap has trended downward each year However, for the fifth year in a row, the gender pay gap persists across all industry and occupations.