The release of the first report since the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 passed in parliament has generated a lot of discussion across Australia.
This new level of transparency is designed to escalate progress by helping organisations understand contributing factors to gender pay inequality and how to overcome them. The reporting highlights industries and specific employers that are succeeding and failing to achieve gender pay equality, providing insights that employers have not previously been able to access.
According to the WGA report, across all private companies that reported this year, Australia has a median 14.5 per cent pay gap when it comes to base remuneration. However, this gets higher once additional payments are included. While many employers have pointed to the flaws in the new report, most prominently in relation to the annualised salaries of casual and part-time employees, the WGEA has said it is important to include them as women make up a large proportion of this workforce.
In this article, we discuss the changes, key learning and the long-term implications of the WGEA report.
What has changed in WGEA reporting?
Revised legislation enables the WGEA to publish the gender pay gaps of all private sector employers with 100 or more employees (2025 for Commonwealth public sector employers). Organisations with 500 or more employees will be required to have policies or strategies that cover all six Gender Equality Indicators from April 2024. These indicators include gender composition of the workforce and governing bodies, equal remuneration between women and men, availability and utility of employment terms, conditions and practices, employee consultation and sexual harassment.
With increased reporting requirements around age, primary work location and CEO remuneration being introduced from April 24 also, future reporting will have even greater transparency.
What are the key learnings from the report?
The median total remuneration gender pay gap is 19%, which means over a year, the median of what a women is paid is $18,461 less than the median of a man, when additional payments such as bonuses, superannuation and overtime are included. This 4.5% difference from base remuneration to total remuneration demonstrates these elements do matter.
With the changes to reporting, companies with over 100 employees have nowhere to hide! With competitor data also available, this can work for against an organisation depending on their gender pay gap in terms of both attraction and retention of employees and customers. The Mining, Electricity, Water and Waste Services, and Financial and Insurance Services industries face the greatest challenges, according to the latest report, with 90% or more of employers having a gender pay gap in favour of men and 80% of those with a gap above 9.1%.
Results become more significant when broken down further. The Professional Services, Scientific and Technical Services (excluding Computer Design) industry also has significant challenges. The workforce comprises 47% of women with professions in specific segments that attract markedly more men than women.
As a result, the most significant gaps are for key management ($65,912), with the gender pay gap across all managers over $40,000. It is also significant for technicians and trades workers ($37,843), along with machinery operators and drivers ($39,174). We wrote previously about the broken rung on the ladder to senior leadership, which becomes even greater when fewer women work in specific professions like engineering or trades.
The WGEA have created excellent tools to allow employers to further explore their industries.
What are the long-term implications from the report?
There are several points to note from this report, and thankfully they’re not all negative. The gender pay gap in Australia has reduced over the last decade, resulting in part from deliberate efforts from employers and government. While most of the coverage focuses on organisations who are performing badly, it is equally important to look at companies who are performing well and how they went about it.
The amendments in the Paid Parental Leave Amendment are just one example of government intervention that will see two more weeks of paid parental leave from 1 July 2024, with the scheme increasing to 26 weeks by 2026. Superannuation will also be paid as part of this scheme from 1st July 2025 and by 2026, a total of 4 weeks will be reserved for each parent on a ‘use it or lose' it basis to encourage greater sharing of care responsibilities.
The WGEA has provided a guide to gender pay equity to help businesses build a business case for change; it is essential that leaders are committed because it is likely budget allocations will be required. When identifying pay gaps and delving deeper to determine what is causing them, WGEA recommends asking the questions:
· Can you explain this?
· Can you justify it?
As many organisations will be required to explain and justify pay gaps to existing and potential employees and customers, they are even more critical questions. For organisations with significant pay gaps, it can be about showing progress, as it may not be an easy fix. This is why an action plan is necessary, which may be part of a longer-term strategy with actions in stages.
The
AFR predicts that over time, government agencies, and probably employees too, will be watching to see which companies’ gaps are closing, and which are widening, and why. While many are still processing the new report a few weeks on, reactions to reports suggests that companies who ignore gender pay gaps will be doing so at their peril.
