Companies to be named and shamed on pay gap?

In a submission to the Federal Government’s Review of the Workplace Gender Equality Act 2012, the Workplace Gender Equality Agency has called up on the government to increase the powers of the Act by publishing individual employers’ pay gaps and forcing them to make targets and meet those targets within a reasonable timeframe.

It proposes the Act :

  • Require the collection of remuneration data for CEOs.

Currently, 51.3% of employers provided remuneration data for the CEO on a voluntary basis. The Agency does not recommend making CEO remuneration public, rather including it in gender pay gap and other remuneration calculations.

  • Increase the minimum standards expected of employers under the Workplace Gender Equality (Minimum Standards) Instrument 2014.

The minimum standards require employers with 500 or more employees to have one policy and/or strategy in place to support one or more of the gender equality indicators (GEIs). These include gender composition, equal remuneration between women and men, availability of flexible working arrangement, and sex-based harassment and discrimination.

The 2019-20 WGEA dataset shows that all employers with 500 or more employees met the minimum standards, which WGEA attributed to the fact that most organisations (99.6%) have a policy or strategy in place for the prevention of sex-based harassment and discrimination.

WGEA was concerned that despite high compliance with the minimum standards among employers, the gender pay gap persists, rates of sex-based harassment and discrimination remain high, and women remain underrepresented in senior leadership.

The WGEA recommends the minimum standards be changed to require:

  • Employers to have a policy or strategy in place to support all four of the GEIs
  • Employers to set one target against each GEI in the Minimum Standards and report progress against each target with the target to be met within a “reasonable” time frame.
  • All employers to meet the minimum standards (not just those with over 500 employees).
  • Require publication of gender pay gap data

The WGEA believes Transparency is “a vital first step” towards addressing the discrimination that contributes to pay gaps and other workplace inequalities and that it will foster stakeholder engagement.

Specifically, it recommends removing the confidentiality of individual organisation gender pay gaps on base salary and total remuneration and enabling the publishing of this data alongside the other public indicators. This means including an individual organisation gender pay gap expressed as a percentage as well as the average dollar difference between the earnings of employees by gender. The Agency also proposes providing the gender pay gap and workforce composition by quartiles. This means providing data on the gender pay gap for the organisation’s highest paid quarter, upper middle quarter, lower middle quarter, and lowest paid quarter, along with the gender composition of each pay quarter (by percentage).

In addition to the issues discussed in detail above, the WGEA also makes other recommendations including expansion of the type of data the number the WGEA collects from covered companies, standardisation of the reference date for collection and  the expansion of the coverage of companies required to report against the GEIs (to non-public sector employers with over 50 or more employees and public sector employers with 20 or more employees).

To read the submission in detail, it can be found HERE.

For a summary of the gap, see HERE.

© Guerdon Associates 2024
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