Gender Pay Audits
The gender pay gap in New Zealand was 9.7% in September 2017 according to Statistics NZ. A March 2017 Ministry for Women report that examined the causes of the gender pay gap in New Zealand found that 80% of the gender pay gap is unexplained. This unexplained gap was probably due to harder to measure factors such as unconscious bias.
Evidence exists of a gender pay gap in the New Zealand legal profession. The hourly charge out rate for women is lower than males by an average of 7% to 10% in all sizes of law firms and the vast majority of locations. Female lawyers’ salaries fall below their male counterparts at the lower and upper ends of the scale.
The UK Institute for Fiscal Studies recently published a report on the effect of motherhood on the gender pay gap. It found that it is the highest-educated women whose wages are the furthest behind their male counterparts – and this is particularly related to the fact that they lose out a lot from working part-time.
Gender pay audits
Gender pay audits enable legal workplaces to review their gender pay gap status, consider the causes of any gaps and take action to close the gender pay gap. The gender pay gap measures the difference between men and women’s earnings across both full and part time roles. Other factors, such as ethnicity, full-time v part time, can also be included in pay audits.
The gender pay gap is usually expressed as a percentage:
Check out the Statistics New Zealand guide for more information about measuring the gender pay gap.
The ‘unadjusted’ gender pay gap is a measure of the gender pay gap before considering factors such as qualifications, experience and seniority.
The case for pay equity
According to the Human Rights Commission, a reduction in the pay gap can help to:
- attract the best employees
- improve employee retention
- increase workplace productivity and financial performance
- improve access to target markets
- increase their reputation and market share
- benefit the economy e.g. through raising GDP and supporting our ageing population,
Benefits of gender pay audits
Pay equity should be a top priority for legal workplaces. Without assessing the data, it is impossible to know whether employees are receiving equal pay. Conducting an audit can help to:
- improve transparency
- identify patterns related to gender
- fix practices that maybe discriminatory or as a result of unconscious bias
- show commitment to employees
- demonstrate a commitment to gender equality to clients
Types of pay gaps
Legal workplaces can assess their data in different ways to reveal issues relating to pay equity. Conducting an audit can reveal different types of gender pay gap.
Like for like roles will include the same or substantially similar tasks. An example might be two solicitors of an equal level working in the same department. A pay gap between men and women doing like for like work might reveal bias in discretionary pay decisions, treatment of full-time v part-time employees and performance related bonuses.
Roles of the same level will include roles that are comparable, but do not necessarily include the same tasks. For example, two junior solicitors would be of the same level but one might work in the litigation team and the other in the property team. Pay gaps in roles of an equal level might reveal a discrepancy in how male and female pay is dispersed within these levels, or that typically male-dominated areas of law are valued more highly than female-dominated areas.
Pay gaps across a legal workplace could reflect a lack of women in senior roles, and institutional barriers preventing women from progressing into higher paying leadership positions.
Conducting an audit
The following is intended as a guide for legal workplaces to conduct an internal gender pay audit. The Australian Workplace Gender Equality Agency toolkits also provides useful resources and a gender pay gap calculator that larger legal workplaces can use to measure their pay gap status.
1. Define the task at hand
This will involve deciding who will be responsible for conducting the audit, whether to assess only gender or other factors as well such as ethnicity, whether the audit will cover all employees, whether outside expertise is needed and identifying the data required to conduct the audit (such as job title, contract status, qualifications, experience, salary and hours worked).
2. Gather and analyse the data
The next step is to gather data on male and female pay across like for like work, across the legal workplace and at each level. The Ministry for Women provides advice on what should be measured within a legal workplace. There are benefits to measuring both the mean (average) and median pay, and ideally both should be used. The important thing is to be consistent with reporting over time. Once this data is gathered, the difference between male and female pay can be calculated to identify gender pay gaps.
3. Consider the causes
If the audit has revealed a gender pay gap, the next step is to identify why the gap might exist. As noted by the Ministry of Women, possible causes of a gender pay gap include:
- men on average receiving higher starting salaries, discretionary salaries, salary increases or performance ratings
- more men in higher levels and more women in lower levels of the organisation
- more men in the types of roles that lead to advancement
- men advancing more quickly than women
- slower career progression for employees who take care-giving breaks, or work part-time or flexibly.
4. Identify actions that are needed
If the data shows gender pay gaps, employers should develop an action plan to address this. The actions taken will depend on the cause of the pay gap, and might include introducing a pay equity policy, a review of starting salaries in different teams, unconscious bias training, a review of discretionary bonuses and a review of performance based pay criteria. It also might include normalising flexible working and career breaks for all employees, increasing transparency around salary ranges and ensuring that the working environment is inclusive.
5. Monitor progress
Gender pay audits should be part of an ongoing commitment to pay equity. Conducting a regular gender pay audit annually is useful for monitoring progress within a legal workplace and tracking the impact of any new pay equity policies.
Further reading and resources
- The Ministry for Women has advice for employers and individual women on fixing the gender pay gap.
- The Workplace Gender Equality Agency in Australia has a guide to gender pay equity that provides an accessible resource that can be used by legal workplaces to improve pay equity.
- Freakonomics podcast on 'The True Story behind the Gender Pay Gap'.
- Male Champions of Change in Australia closing the gender pay gap report provides a practical resource that can be used by legal workplaces to close their gender pay gaps.
- The Law Society of Scotland Ensuring Fairness, Closing the Pay Gap for guidance on how to conduct a gender pay audit within your organisation.
- Statistics New Zealand guidance on Measuring the Gender Pay Gap.
- What Drives the Gender Wage Gap? Examining the Roles of Sorting, Productivity Differences, and Discrimination
- England and Wales Law Society gender pay gap reporting recommendations
Last updated on the 16th November 2018