Recent changes to the Equal Pay Act 1972 have sparked confusion and controversy. Just a few weeks ago the issue was at the center of the first ever C bomb in our Parliament’s history. So, what’s going on, and what do these changes mean for workers?
The Equal Pay Act 1972 allows for employees to make two types of claims against an employer:
- An Equal Pay Claim
- A Pay Equity Claim
Equal Pay
An Equal Pay claim under the Act means same work, same pay. The Government has not made any changes to this process.
Pay Equity
A Pay Equity Claim means different work/job, comparable value.
For example: the teacher workforce is predominantly women and tradies are predominantly men. If teachers can show their work requires a similar level of skill, responsibility, and effort they can argue that they should be paid the same, even though the jobs themselves are different.
These types of claims were only added to the Act in 2020, and it is this part of the law that has just been amended.
New Threshold: “Arguable” to “Has Merit”
Previously employees making a Pay Equity Claim had to show their claim was “arguable”, now the bar is higher. Employees now need to show that their claim “has merit” which means they must provide:
- Reasonable grounds to believe their work has been historically undervalued;
- That their work continues to be undervalued because it’s mostly done by women;
- Proof that at least 70% of the workforce doing the job are women (previously 60%), and proof that this gender makeup has been consistent for 10 years.
Comparator Groups
Previously the Employment Relations Authority (ERA) could choose a comparator group they deemed “useful and relevant”. Now they are restricted to using specific groups set by law.
The choice of comparator group can make or break a claim. Comparing aged care workers to correctional officers might show undervaluation, while comparing them to cleaners might not.
Removed Review Requirement
Previously if a claim succeeded, the ERA had to set out a process for ongoing pay reviews. That requirement has been removed, Any review clause already in place is now invalid.
Conclusion
In short, these changes make it more difficult for women in female dominated industries to bring successful pay equity claims. Supporters say the law now offers more clarity, critics argue it adds new hurdles to achieving fair pay.
