13 Apr 2022

Urgency called for as parliament committee works on pay gaps

From The House , 6:55 pm on 13 April 2022

The Human Rights Commission is asking the government to move with urgency on bringing about pay parity.

However, the Opposition is worried that things are moving too quickly in this area after a raft of legislation over recent times has seen Parliament making laws aimed at improving the conditions and pay of workers.

The Equal Employment Opportunities Commissioner Saunoamaali’i Karanina Sumeo.

Equal Employment Opportunities Commissioner, Saunoamaali’i Karanina Sumeo, addressing the Education and Workforce Select Committee, 13 April 2022 Photo: Supplied

Today, the Education and Workforce Select Committee discussed a petition urging the Government to establish an independent pay transparency agency to help close the gender and ethnic pay gaps.

The Human Rights Commission’s Equal Employment Opportunities Commissioner, Saunoamaali’i Karanina Sumeo, handed the petition to Parliament two months ago, and appeared before the committee this morning.

She pointed to a body of evidence underlining how in the employment market the playing field remains uneven, skewered in favour of the highest paid gender-ethnic group in the country — white men.

“Some research that the New Zealand Work Research Institute at AUT (Auckland University of Technology) conducted looked at the differences in pay between Asians and Europeans. And despite the fact that educational outcome achievements on average are above for Asians compared to European, they do not get the pay that should accompany those qualifications,” Dr Sumeo explained.

“So this is really quite urgent for all our of groups, including Pasifika groups.”

Need for urgency

Having done its own investigation into this area, the Select Committee recently recommended that the Government develop pay transparency measures, including placing restrictions on employers’ ability to demand “pay secrecy” in employment contracts.

The Commissioner welcomed the Committee’s recommendations, but still had reservations, including on the urgency involved.

“The paragraph goes ‘We have heard strong evidence on the persistent pay gap for Māori and Pasifika, as well as evidence on persistent pay gaps for other ethnicities. We are of the view these pay gaps should form part of any reporting measures. We understand that this would require working through the policy details with relevant communities but should be phased in over time’. 

“It is the ‘over time’ that I am worried about, because it has been recognised that this is an urgent matter. And I would urge the committee to act on addressing the ethnic pay gap with as much urgency of addressing the gender pay gap,” she told the committee.

No caption

Photo: RNZ / Eva Corlett

Pay secrecy clauses in employment contracts have hindered fairness for vulnerable workers, Dr Sumeo said, urging the committee that rather than recommending that there should be transparency in contracts, they should recommend that there must be transparency in contracts.

She also took issue with the committee’s recommendations that pay transparency should only be required of bigger businesses, not small to medium enterprises, who she feels should also be included.

Impacts on small businesses

Around this point, one could see National’s Paul Goldsmith starting to squirm in his seat in the Committee’s Zoom window. His problem with this petition, he said, was the pressure on small business operators from imposing what he describes as more cost burden onto those businesses.

“It’s very easy just to say ‘yes they should do this’ and you talk about exploitation, and we’re conscious of the fact that there’s been a very significant increase in the minimum wage for example; very significant increase in worker entitlements around sick leave; extra public holidays; we’re now potentially looking at fair pay agreements and a whole range of new requirements that would accompany that; now you’re advocating this particular issue. 

National MP Paul Goldsmith

National MP Paul Goldsmith Photo: VNP / Daniela Maoate-Cox

“I just sort of wonder how you think a small business owner with a big mortgage just trying to meet cash flow and deal with the GST receipts, and dealing with all the complications of staying in business and staying afloat, can cope with all this?” Goldsmith questioned the commissioner.

In response, Dr Sumeo said it was about businesses doing the right thing, recognising laws and human rights, and being supported in doing so.

“How that is done, Mr Goldsmith, I would say that that is not the role of HRC to prescribe that, but it’s something that our unions and our businesses and bodies perhaps like the EMA (Employers and Manufacturers Association) can help to develop,” she said.

Ultimately the National Party members of the Education and Workforce Select Committee oppose mandatory pay transparency. Whether their concerns will prevent the Committee following up on the petition’s request remains to be seen.

RNZ’s The House - parliamentary legislation, issues and insights - is made with funding from Parliament.