In order to improve the gender pay gap in Australia, employers need to be held accountable for gender equality performance.
On 30 March 2023, the Federal Parliament passed the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023. These reforms, which include the crucial legislative change to allow the Workplace Gender Equality Agency (WGEA) to publish the gender pay gaps of individual organisations with more than 100 employees, are a welcome upgrade.
But while the changes are a major positive development in pay transparency more is needed to not only require employers to just report on gender equality, but to actually take steps to improve it. This action is important if Australia is to regain its once world-leading position in legislating for gender equality; we now rank 43rd in the World Economic Forum’s global gender gap index.
WGEA have produced a roadmap, which outlines how the agency will implement these reforms over the next few years. In 2024, gender pay gaps will be published for private sector employers; public sector employers will follow in late 2024 or early 2025. WGEA will also start collecting more detailed data, including CEO pay from April 2024, for more accurate reporting of gender pay gaps in 2025. As nearly 80 per cent of CEOs in Australia are male and they are among the highest paid positions in the country, we expect this improved transparency to have a major impact on the gender pay gaps of many organisations.
We have been researching gender pay gap reporting systems and advocating for these reforms for several years. In 2021, the Global Institute for Women’s Leadership (GIWL) at ANU partnered with our sister Institute at King’s College London on a major international report on gender pay gap reporting. GIWL at ANU led the Australian case study and produced a companion report focusing on Australia’s system.
Our report made one key issue clear. In order to improve the gender pay gap in Australia, we need to publish the gender pay gap of individual organisations so employers can be held accountable for gender equality performance. Our other key recommendations include mandating corrective action to close the gender pay gap, as well as fully implementing existing sanctions for non-compliance. Until all of these measures are in place, we will not close the gender pay gap Australia faces.
In December 2021, the Australian Department of Prime Minister and Cabinet (PM&C) commenced a review of the Workplace Gender Equality Act 2012. The PM&C review produced 10 recommendations, of which publishing organisation gender pay gaps was the second headline recommendation. We were encouraged to see that the recent reforms deliver either in full, or in part, on six of these ten recommendations.
While these reforms are promising in their ability to achieve change with improved transparency and data collection, they need to go further. They do not mandate corrective action and don’t cover the entirety of the Australian workforce. Smaller employers remain excluded as the regulatory burden is disproportionately higher for them. Under the new reforms, larger employers (with 500 or more employees) will still need to have policies and strategies for six gender equality indicators but without clear measures for accountability and corrective action there is no guarantee that these policies will translate into action.
We note that further reforms are proposed and currently undergoing careful consideration – setting and achieving gender equality targets where employers are required to report progress against these targets is one of them. This approach would go some way to building more accountability into the system. Additional data collection on intersectionality and changes to support the Respect@Work program are also being considered.
Our research highlights how gender pay gap reporting can make a real difference if the reporting system includes key features such as transparency, coverage and accountability for closing the gender pay gap. While the gender pay gap in Australia improved following the introduction of the 2012 Act, this progress has stalled in recent years, highlighting the need for further action.
As we discovered in our research, the transparency of gender pay gaps at an organisation level is an important mechanism for empowering stakeholders to accelerate change by exerting pressure on reporting entities. This was the most common recommendation among the stakeholders we interviewed in our research and one that has the potential to deliver on much needed change in closing the gender pay gap.
We hope to see recommendations on mandatory corrective action implemented in future legislation but as it currently stands, it is increasingly important that stakeholders use the organisation level gender pay gap data that will soon be available to drive progress and take definitive steps towards closing the gender pay gap in their organisations.
This article is written by Dr Jananie William, Dr Sally Curtis, Dr Miriam Glennie, Dr Anna von Reibnitz and Professor Sarbari Bordia, researchers based at ANU and co-authors of the GIWL at ANU report, Gender pay gap reporting in Australia: time for an upgrade.
Top image: ink drop/stock.adobe.com
Global Institute for Women’s Leadership
Dr Miriam Glennie is a Research Associate at the Global Institute for Women’s Leadership (GIWL) at The Australian National University.
ANU Research School of Finance, Actuarial Studies and Statistics
Anna von Reibnitz is a Senior Lecturer in Finance, Convener of the Finance Masters programs and Co-Convener of the ANU Student Managed Fund.
ANU Research School of Management
Professor Sarbari Bordia is a Professor of Management and Deputy Director (Research) of the Research School of Management.
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