On March 30, 2023, the Australian Parliament passed the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023. The bill will enable the Workplace Gender Equality Agency to publish the gender pay gaps of private and Commonwealth (i.e., federal government) companies and entities with more than 100 employees.
According to the explanatory memorandum to the bill, the changes made to the Workplace Gender Equality Act 2012 (Cth) followed a review of that legislation undertaken in 2021, which concluded that “the gender pay gap in Australia was not closing at a fast enough rate.” The bill gives effect to the government’s commitment to implement the recommendations of that review, and to the Labor Party’s 2022 election commitment to close the gender pay gap.
On introducing the bill in early February, the minister for women said that, “[o]n average, women working full-time can expect to earn 14.1% less than men per week in their pay packets,” and that “global experience shows transparency encourages organisations to take action to close the gender pay gap in their workplace.” According to a media release by the Workplace Gender Equality Agency on February 23, 2023, Australia’s national gender pay gap had dropped to 13.3%. The Australian Bureau of Statistics states that “[t]he gender pay gap is the difference in earnings of men and women, expressed as a proportion of men’s earnings.” It has published a guide to help people understand the gender pay gap and how it is measured in Australia. The Workplace Gender Equality Agency has produced a gender pay gap calculator to help employers identify gender pay gaps within their organization.
The explanatory memorandum for the bill states as follows:
Taken together, the Items in this Division amend the Act to allow the Agency to publish gender pay gaps for each relevant employer for each reporting period, using the information, including remuneration information, contained in the relevant employer’s public report for that reporting period.
These amendments fulfil Recommendation 2 of the Review, which noted many stakeholders called for the Agency to publish the gender pay gaps of relevant employers, as the current approach of publishing industry gender pay gaps is not creating the transparency, accountability and insights necessary to close the gender pay gap fast enough.
While these amendments do impose a new reporting and publication requirement on the Agency, it is noted the Agency itself recommended this change, on the basis that increased transparency in Australia’s gender equality reporting is a vital first step towards addressing the discrimination that contributes to pay gaps and other workplace inequalities, and could cause relevant employers to assess systems and processes for pay, job evaluation and performance. The Agency further noted publishing employer gender pay gaps could also generate stakeholder engagement and pressure and inform investment decisions. Without employer gender pay gaps – identified by others as arguably the most important variable – in the Agency’s public dataset, the dataset is less useful for improving gender equality outcomes.
Relevant employers are already required to provide remuneration data to the Agency, so these amendments do not impose any additional reporting requirements on relevant employers. (Workplace Gender Equality Amendment Bill, Explanatory Memorandum at 8–9.)
The Workplace Gender Equality Agency stated that the passage of the bill means that “[m]ore than four and a half million Australian employees will be able to access their employer’s gender pay gaps starting in early 2024,” representing about 40% of the country’s workforce. Furthermore, “[i]nternational research is showing that publishing employer pay gaps can be a powerful motivation for companies to prioritise gender equality and to lower their gender pay gaps. In the UK, the approach has already motivated employers to substantially narrow the wage gap between men and women.”
According to Reuters, “Britain made it compulsory in 2017 for all companies with more than 250 employees to report the difference in earnings of male and female staff. The European Union enacted similar legislation in 2021.”
Kelly Buchanan, Law Library of Congress
April 18, 2023
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