Exploring The Gender Pay Gap this International Women’s Day

Today marks International Women’s Day 2024, held on March 8th each year.

International Women’s Day is a global day celebrating the social, economic, cultural, and political achievements of women. The day also marks a call to action for accelerating women’s equality.

IWD has occurred for well over a century, with the first IWD gathering in 1911 supported by over a million people. Today, IWD belongs to all groups collectively everywhere. IWD is not country, group or organisation specific.

The UN Women’s theme for this year is “Count Her In: Invest in Women. Accelerate Progress.” Based on the priority theme for the United Nations 68th Commission on the Status of Women, Count Her In will examine the pathways to greater economic inclusion for women and girls everywhere.

One of the biggest issues facing women in the workplace is the gender pay gap. Last week the Workplace Gender Equality Agency (WGEA) released its gender pay gap data, just in time for International Women’s Day this week. One of the

 

Gender Pay Gap in Australia

 

The WGEA is a government agency that aims to promote and improve gender equality in Australian workplaces. Last week, the WGEA published details of the gender pay gaps that exist in Australia’s largest employers. It included base salary and total remuneration median gender pay gaps for private sector employers in Australia with 100 or more employees.

It’s the first time individual employers were named and some of the results showed there is still a large discrepancy between what women and men earn.

The greater transparency in naming individual employers is as a result of amendments to the Workplace Gender Equality Act last year. Employers are required to submit gender pay data to WGEA which then publishes details of that data.

The WGEA published results show that:

  • 30% of employers have a median gender pay gap between the target range of -5% and +5%.
  • 62% of median employer gender pay gaps are over 5% and in favour of men.
  • The rest (8%) are less than -5% and in favour of women.
  • Across all employers, 50% have a gender pay gap of over 9.1%.

The Minister for Women, Senator Katy Gallagher, said the publication of employer gender pay gaps is a pivotal moment for gender equality in Australia.

“The release of employer gender pay gaps marks a historic step towards transparency and accountability in addressing gender inequality,” Minister Gallagher said.

“The gender pay gap is a persistent and complex problem that costs the Australian economy $51.8 billion every year,” Minister Gallagher said. Read more from this web page here.

 

Pay Secrecy Clauses

A pay secrecy clause is a clause in an employment contract that prohibits employees from sharing their salaries. This used to be a common clause in Australian employment contracts and contributed to a culture of secrecy around bonuses, starting salaries and remuneration packages.
Pay secrecy clauses were traditionally thought to be beneficial to employers when hiring new staff as it helped to protect privacy.
However, it was common for issues to arise around the use of pay secrecy clauses which held down wages and disproportionately impacted women in the workplace. They created an opportunity for unequal pay and negatively impacted workplace culture.
Check out this 2022 ABC article on how pay secrecy clauses in Australia impacted on women in the workplace. Read here
The passing of the Albanese government’s “Secure Jobs, Better Pay Bill” reform package in December 2022 included a ban on pay secrecy policies.

Here is a summary from the Department of Employment and Workplace Relations (read more here):

“The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 amends the Fair Work Act 2009 (the Act) to prohibit pay secrecy clauses in employment contracts, improve transparency and protect employees from adverse action if they exercise their right to disclose (or not disclose) their remuneration.

The amendments, which provide employees with a positive right to disclose, or not disclose, their remuneration, apply to new employment contracts or other written agreements entered into (and contracts or agreements that are revised or amended) after the provision comes into effect on 7 December 2022. Pay secrecy terms in current contracts of employment and written agreements will continue to operate, until they are varied or a new contract is entered into, in which case they will no longer have effect. Current agreements and contracts of employment which do not have pay secrecy terms are not affected, with the right coming into effect immediately.”

The ban was primarily aimed at reducing gender-based pay differences – part of a larger suite of reforms that make gender equity a key principle of the Fair Work Act. According to federal employment and workplace relations minister Tony Burke, pay secrecy clauses have long been used to conceal gender pay discrepancies.
Studies in the United Kingdom, the United States, Canada and Denmark all reported a decline in the gender pay gap as a result of legislation to promote pay transparency. The EU has also the issue of pay secrecy with the new EU Pay Transparency Directive which was adopted by the European Parliament on 30 March 2023. It’s expected to be translated into national law of the EU member states within three years. The directive includes a set of binding measures to increase pay transparency.

Litton Legal

At Litton Legal, we’re proud to be a female owned and led law firm and fully support movements towards making the world a more equitable, fair and inclusive one.

From the whole team at Litton Legal, we wish you a Happy International Women’s Day!