The Australian Workplace Gender Equality Agency (WGEA) defines the gender pay gap as follows:
“The gender pay gap measures the difference between the average earnings of women and men in the workforce. The gender pay gap is an internationally established measure of women’s position in the economy in comparison to men. The gender pay gap is the result of the social and economic factors that combine to reduce women’s earning capacity over their lifetime.
The gender pay gap is not the difference between two people being paid differently for work of the same or comparable value, which is unlawful. This is called unequal pay. Equal Pay is when men and women receive equal pay for work of equal or comparable value. In practical terms, this means that:
WGEA has a set of resources dedicated to addressing the gender pay gap, including some useful myth-busting infographics. They explain the drivers of the gender pay gap as follows:
The gap between women’s and men’s earnings is a symptom of a broader cultural problem in workplaces. It reflects the historic and systemic undervaluing of women’s workplace contributions and the significant barriers that lead to the under-representation of women in senior executive and management roles.
The gender pay gap is influenced by a number of factors, including:
The gender pay gap in New Zealand was 9.1% in August 2021 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.
Stats NZ published a report in 2017: “Effect of Motherhood on Pay”, which found that the gender pay gap between male and female parents was 17%. The gender pay gap between non-parents was only 5%, confirming a “motherhood penalty” of 12 percentage points.
The Ministry for Women’s 2018 research paper “Parenthood and Labour Market Outcomes" confirmed that the gender pay gap in New Zealand is also larger among parents than non-parents, and that although women in all income groups experienced decreases in income upon becoming parents, women from the highest income groups experienced the greatest magnitude of decrease. Meanwhile, the research found that men’s incomes continue to increase steadily when they become fathers, causing their monthly incomes to pull further ahead of those of mothers.
A gender pay audit is the process of assessing whether you have a gender pay gap, identifying causes and, if necessary, making a plan to close the gender pay gap.
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 guidelines for measuring and analysing organisational gender pay gaps, published jointly by The State Services Commission, The Ministry for Women and Stats NZ.
The ‘unadjusted’ gender pay gap is a measure of the gender pay gap before considering factors such as qualifications, experience and seniority.
According to the Human Rights Commission, a reduction in the pay gap can help to:
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:
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.
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.
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).
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.
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:
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.
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.
Mindthegap.nz also has a pay gap registry where employers can publicly record their gender pay gap.