What HR needs to know about new gender pay gap reporting requirements


With just a few weeks to go until employers are required to report on their organisation’s gender pay gap, here are some key legal and ethical considerations to keep in mind as the new legislation takes effect.

Editor’s note (27/03/24): The Workplace Gender Equality Agency has today revealed the gender pay gap in Australia’s private sector ahead of broader reporting changes that come into effect in April. You can read more about those changes in the article below or visit the WGEA website to learn about the current pay gap in Australia’s private sector.

In February last year, the Albanese government unveiled a bold new strategy to tackle Australia’s gender pay gap with the announcement of the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023. The bill, passed in March 2023, will require some Australian employers to publicly share the extent of pay inequality within their organisations.

From 27 February 2024, private sector companies with 100 employees or more will be required to report their aggregate gender pay gap data to the Workplace Gender Equality Agency (WGEA). This information will be made publicly available via the WGEA’s website. 

Public sector employers are due to be subject to the same requirements as of late 2024 or early 2025.

According to Fay Calderone, Partner at Hall and Wilcox, employers who fail to comply with the new legislation may risk being named by the WGEA in reports supplied to government ministers or by other means, such as media outlets.

“The employer may [also] not be eligible to compete for contracts under the Commonwealth procurement framework, and may not be eligible for Commonwealth grants or other financial assistance,” she says. 

Given the complex and sensitive nature of the issue at hand, Calderone recommends a number of key considerations and actions for employers hoping to get ahead of the changes and ensure they are implemented with compliance in mind. 

“Transparency builds trust when coupled with accountability for actions to address it. Remaining silent could be met with cynicism and breed discontent.” – Fay Calderone, Partner at Hall and Wilcox

What will the new gender pay gap requirements entail?

In addition to the publication of gender pay gap data for organisations with 100+ employees, employers with 500 or more employees will be subject to further obligations.

Per the new requirements, organisations of this size must have a policy or strategy for each of the following gender equality indicators:

  • Gender composition of the workforce.
  • Gender composition of governing bodies.
  • Equal remuneration between women and men.
  • Availability and utility of employment terms, flexible working arrangements, support for family and carer’s responsibilities.
  • Consultation with employees on gender equality in the workplace.
  • Sexual harassment, harassment on the ground of sex or discrimination.

These obligations will commence on 1 April 2024. Also commencing in April, employers with 100+ employees will be required to provide more comprehensive data to the WGEA, including employees’ age and primary workplace location. They will also be required to report on CEO, head of business and casual manager remuneration. 

Reporting on sexual harassment and discrimination on the grounds of sex will also be mandatory from this time.

You can learn more about the changes and what they will mean for employers via the WGEA website.

How should HR prepare for the changes?

In order to prevent any negative fallout from the publication of gender pay gaps, Calderone suggests employers lean into the transparency mandated by the bill rather than resisting it. 

“Tell your employees that the gender pay gap will be published,” she says. “Proactively addressing this and pointing your workforce to the published data shows commitment to promoting and improving gender equality in the workplace, even if it means openly confronting a gender pay gap. 

“Transparency builds trust when coupled with accountability for actions to address it. Remaining silent could be met with cynicism and breed discontent.”

As well as openly acknowledging the data and any aspects of it that could provoke concern, she recommends highlighting and celebrating positive aspects of the data, such as trends that show progress in eliminating pay gaps. 

“The trajectory is important. Demonstrating you are heading in the right direction and are committed to accelerating the pace of change, even if you can’t quickly seal the gap, will be helpful.”

If significant pay disparities are revealed, employers can proactively address any concerns about this by communicating how the organisation plans to approach the gap and its commitment to making progress in closing it. It’s also useful to highlight any legitimate reasons or nuances behind the data.

“[For example], in senior ranks where there is only a small headcount, one hire either way can significantly shift the dial,” says Calderone. “Although you should be cautious about the confidentiality of individual executives or managers, some general statements may be made to this effect.”

Rather than viewing the publication of pay gaps as a threat, it can be seen as a helpful catalyst for progress. By examining trends that contribute to pay inequity within their organisation, employers can craft a more informed and targeted approach to addressing it. Calderone points to a common example of a trend like this related to flexible working.

“If there are trends of the gap increasing when staff return from parental leave or flexible work arrangements, consider why this is occurring and whether flexism or proximity bias is a contributing factor. Implement initiatives to ensure all managers across the organisation are taking deliberate and concerted steps to address this,” she says. 

“This involves [careful] consideration of the structural and cultural drivers contributing to the gender pay gap.”


Need help taking steps to reduce bias and support inclusion in the workplace? AHRI’s short course will provide you with techniques to create a diverse and inclusive workplace.


 

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Jim
Jim
2 months ago

Thanks for the relevant article. This may well solve a few instances of unfair wage disparities. But in the main this appears not about fairness, it’s more about woke politics invading business wellness. As we hold our breath knowing the consequences of this flawed logic which will include pretend fairness, forced incompetence and job dissatisfaction, it will end up creating significantly more detrimental knock on effects than any apparent gender gap disparities in 2024.

More transparency
More transparency
2 months ago

It should be noted that there are more than 2,000,000 Australian’s off all genders employed by government agencies. As WGEA is empowered by federal legislation the vast majority of these people’s wage data isn’t captured. The initiative is still worthwhile, however it is hardly every employer with more than 100 employees participating, and it makes you wonder how much the government actually values the initiative when the vast majority don’t participate.

Max Underhill
Max Underhill
1 month ago

While Australia didn’t have legislation up until last year we were signatories to the ILO convention on equal pay for equal work. It is management practices that is the issue. I don’t believe the legislation will necessarily fix this. Your ABC business person seems to be combining 2 issues. The international labour organisation (ILO) ch 100 equal pay for equal work was agreed in 1951. In the 70+ years since this quantitative systems have been developed to remove bias (and as much unconscious bias as possible) but these systems are not being used – employers don’t want to loose control… Read more »

Niamh
Niamh
1 month ago

Interesting to see private organisations forced to comply prior to public organisations. I lost faith in WGEA when looking at the methodology and calculations. Instead of focusing on same job same pay (taking into consideration experience, performance, capability) to look at where there may be a true gender pay gap, the flawed logic will only work to encourage misinformed dissatisfaction. For example, when there’s no adjustment to pro-rata for part-time workers, surely it’s no surprise that part-time workers are paid less than their full-time counterparts.

More on HRM

What HR needs to know about new gender pay gap reporting requirements


With just a few weeks to go until employers are required to report on their organisation’s gender pay gap, here are some key legal and ethical considerations to keep in mind as the new legislation takes effect.

Editor’s note (27/03/24): The Workplace Gender Equality Agency has today revealed the gender pay gap in Australia’s private sector ahead of broader reporting changes that come into effect in April. You can read more about those changes in the article below or visit the WGEA website to learn about the current pay gap in Australia’s private sector.

In February last year, the Albanese government unveiled a bold new strategy to tackle Australia’s gender pay gap with the announcement of the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023. The bill, passed in March 2023, will require some Australian employers to publicly share the extent of pay inequality within their organisations.

From 27 February 2024, private sector companies with 100 employees or more will be required to report their aggregate gender pay gap data to the Workplace Gender Equality Agency (WGEA). This information will be made publicly available via the WGEA’s website. 

Public sector employers are due to be subject to the same requirements as of late 2024 or early 2025.

According to Fay Calderone, Partner at Hall and Wilcox, employers who fail to comply with the new legislation may risk being named by the WGEA in reports supplied to government ministers or by other means, such as media outlets.

“The employer may [also] not be eligible to compete for contracts under the Commonwealth procurement framework, and may not be eligible for Commonwealth grants or other financial assistance,” she says. 

Given the complex and sensitive nature of the issue at hand, Calderone recommends a number of key considerations and actions for employers hoping to get ahead of the changes and ensure they are implemented with compliance in mind. 

“Transparency builds trust when coupled with accountability for actions to address it. Remaining silent could be met with cynicism and breed discontent.” – Fay Calderone, Partner at Hall and Wilcox

What will the new gender pay gap requirements entail?

In addition to the publication of gender pay gap data for organisations with 100+ employees, employers with 500 or more employees will be subject to further obligations.

Per the new requirements, organisations of this size must have a policy or strategy for each of the following gender equality indicators:

  • Gender composition of the workforce.
  • Gender composition of governing bodies.
  • Equal remuneration between women and men.
  • Availability and utility of employment terms, flexible working arrangements, support for family and carer’s responsibilities.
  • Consultation with employees on gender equality in the workplace.
  • Sexual harassment, harassment on the ground of sex or discrimination.

These obligations will commence on 1 April 2024. Also commencing in April, employers with 100+ employees will be required to provide more comprehensive data to the WGEA, including employees’ age and primary workplace location. They will also be required to report on CEO, head of business and casual manager remuneration. 

Reporting on sexual harassment and discrimination on the grounds of sex will also be mandatory from this time.

You can learn more about the changes and what they will mean for employers via the WGEA website.

How should HR prepare for the changes?

In order to prevent any negative fallout from the publication of gender pay gaps, Calderone suggests employers lean into the transparency mandated by the bill rather than resisting it. 

“Tell your employees that the gender pay gap will be published,” she says. “Proactively addressing this and pointing your workforce to the published data shows commitment to promoting and improving gender equality in the workplace, even if it means openly confronting a gender pay gap. 

“Transparency builds trust when coupled with accountability for actions to address it. Remaining silent could be met with cynicism and breed discontent.”

As well as openly acknowledging the data and any aspects of it that could provoke concern, she recommends highlighting and celebrating positive aspects of the data, such as trends that show progress in eliminating pay gaps. 

“The trajectory is important. Demonstrating you are heading in the right direction and are committed to accelerating the pace of change, even if you can’t quickly seal the gap, will be helpful.”

If significant pay disparities are revealed, employers can proactively address any concerns about this by communicating how the organisation plans to approach the gap and its commitment to making progress in closing it. It’s also useful to highlight any legitimate reasons or nuances behind the data.

“[For example], in senior ranks where there is only a small headcount, one hire either way can significantly shift the dial,” says Calderone. “Although you should be cautious about the confidentiality of individual executives or managers, some general statements may be made to this effect.”

Rather than viewing the publication of pay gaps as a threat, it can be seen as a helpful catalyst for progress. By examining trends that contribute to pay inequity within their organisation, employers can craft a more informed and targeted approach to addressing it. Calderone points to a common example of a trend like this related to flexible working.

“If there are trends of the gap increasing when staff return from parental leave or flexible work arrangements, consider why this is occurring and whether flexism or proximity bias is a contributing factor. Implement initiatives to ensure all managers across the organisation are taking deliberate and concerted steps to address this,” she says. 

“This involves [careful] consideration of the structural and cultural drivers contributing to the gender pay gap.”


Need help taking steps to reduce bias and support inclusion in the workplace? AHRI’s short course will provide you with techniques to create a diverse and inclusive workplace.


 

Subscribe to receive comments
Notify me of
guest

5 Comments
Inline Feedbacks
View all comments
Jim
Jim
2 months ago

Thanks for the relevant article. This may well solve a few instances of unfair wage disparities. But in the main this appears not about fairness, it’s more about woke politics invading business wellness. As we hold our breath knowing the consequences of this flawed logic which will include pretend fairness, forced incompetence and job dissatisfaction, it will end up creating significantly more detrimental knock on effects than any apparent gender gap disparities in 2024.

More transparency
More transparency
2 months ago

It should be noted that there are more than 2,000,000 Australian’s off all genders employed by government agencies. As WGEA is empowered by federal legislation the vast majority of these people’s wage data isn’t captured. The initiative is still worthwhile, however it is hardly every employer with more than 100 employees participating, and it makes you wonder how much the government actually values the initiative when the vast majority don’t participate.

Max Underhill
Max Underhill
1 month ago

While Australia didn’t have legislation up until last year we were signatories to the ILO convention on equal pay for equal work. It is management practices that is the issue. I don’t believe the legislation will necessarily fix this. Your ABC business person seems to be combining 2 issues. The international labour organisation (ILO) ch 100 equal pay for equal work was agreed in 1951. In the 70+ years since this quantitative systems have been developed to remove bias (and as much unconscious bias as possible) but these systems are not being used – employers don’t want to loose control… Read more »

Niamh
Niamh
1 month ago

Interesting to see private organisations forced to comply prior to public organisations. I lost faith in WGEA when looking at the methodology and calculations. Instead of focusing on same job same pay (taking into consideration experience, performance, capability) to look at where there may be a true gender pay gap, the flawed logic will only work to encourage misinformed dissatisfaction. For example, when there’s no adjustment to pro-rata for part-time workers, surely it’s no surprise that part-time workers are paid less than their full-time counterparts.

More on HRM