Te hira o te utu ōrite Why paying people fairly is important

Being paid fairly is a fundamental human right. The New Zealand Government and the Public service is committed to addressing inequitable pay for female-dominated workforces and closing gender and ethnic pay gaps. This is particularly important for women, Māori, Pacific peoples and ethnic groups who are over-represented in lower paid work and under-represented in leadership roles.  

Pay gaps exist across all sectors. In the public service, focused action over the last 6 years have resulted in a drop in the gender pay gap from 12.2% in 2018 to 7.1% in 2023. We are also making progress in closing our Māori, Pacific and Ethnic gaps.

This is lower than the national gender pay gap in Aotearoa New Zealand, which in 2023 was 8.6%. The gender pay gap in Aotearoa New Zealand has reduced steadily from 16.3% in 1998 but has fluctuated over the past decade with little downward movement over the last 6 years. The gender pay gaps for wāhine Māori, Pacific and Asian women, and disabled women are substantially higher than the overall gap.

Ensuring everyone is paid fairly benefits all of us. This is because there is a human connection in fair pay — it doesn’t just improve someone’s life, but the lives of those around them, including their families and communities.

In 2023, the biggest increases in pay in the Public Service were for our lowest paid and non-managerial staff including Pacific men and women. Māori men and women also had above average increases in average pay.

Te whakamārama i ngā āputa utu me te utu ōrite Understanding pay gaps and pay equity

Pay gaps and pay equity may sound similar but they are different concepts.

Pay gaps

Pay gaps are a measure of inequality and show that some groups earn less than others, on average. Differences in pay could be fair or unfair. Pay differences can result from people doing different jobs, or from bias and discrimination, among other reasons.

Pay should reflect the level of skills, responsibilities, effort, experience and working conditions and not be negatively affected by gender, ethnicity or other biases.

It’s important to identify, measure and understand pay gaps in workplaces so that they can be closed.

Two women sit at a table in a cafe, with cups in front of them on the table. The woman on the right is talking, while the woman on the left listens and smiles.

  • Progress on closing Public Service pay gaps

    The Public Service gender pay gap is at its lowest level ever. It fell from 12.2% in 2018 to 7.1% in 2023.  

    The Māori pay gap has also fallen substantially from 11.2% in 2018 to 5.4% in 2023. 

    The Pacific pay gap has also fallen from 21.6% 2018 to 16.6% percent in 2023, but remains much higher than for other groups.  

    The Asian pay gap has increased from 12.6% in 2018 to 13% in 2023. This increase is likely due to the growing proportion of younger Asian public servants who are earlier in their career. 

    Taking action on gender pay gaps has helped to close both gender and Māori pay gaps in the Public Service. 

    Pay equity settlements have also contributed to closing the gaps.  

    This is good news. However, more work is needed to close Pacific, Asian and Ethnic pay gaps. Further, women continue to be paid less on average than men in every ethnic group, and pay gaps for Māori, Pacific and ethnic women are wider than they are for European women. 

    We also know that Rainbow and disabled communities are under-represented in leadership and face pay gaps. 

    Workforce Data  — Pay gaps

  • Taking action to close the Public Service pay gap

    Public Service organisations are committed to Kia Toipoto — the Public Service Pay Gaps Action Plan. Kia Toipoto addresses the common barriers that drive all pay gaps and recognises that targeted action is needed to make progress. It requires Public Service organisations to meet several goals between 2022–2024 including setting up plans and targets to improve gender and ethnic representation in their workforce and leadership.

    Kia Toipoto does not cover the private sector.

    Kia Toipoto 

    Dedicated Taskforce leading action to reduce gender inequality

  • How the Public Service calculates the gender pay gap

    Te Kawa Mataaho Public Service Commission calculates the Public Service gender pay gap differently to the way Stats NZ calculates the national gender pay gap.

    We use mean pay as we think this better reflects the level of inequality. Mean pay captures the effects of pay differences in the highest and lowest paid groups, for example more women in low-paid roles and more men in high-paid roles.

    Stats NZ calculates the national gender pay gap using median pay as it considers this better represents the pay that the typical employee receives.

    Workforce Data — Pay gaps 

Taking action on gender pay gaps has helped to close gender, Māori, Pacific and Asian pay gaps in the Public Service.

Pay equity

In Aotearoa NZ the law does not allow discrimination on the basis of sex.

Pay equity is about ensuring that everyone’s work is valued based on their skills, responsibilities and experience, as well as the effort it requires. It is an important step in ensuring fairness for all workers.

Pay equity recognises that it is possible for 2 jobs to look very different but require the same level or similar level of skills, responsibilities, experience and effort from employees and therefore should be paid similarly.

A woman is working on a building site. She is wearing a hard hat and high vis vest, and carrying a plank of wood over one shoulder.

The pay equity process

The Equal Pay Act 1972 makes it clear that equal pay and pay equity are legal requirements. The Act was updated in 2020 to provide a clear pay equity process to test whether female-dominated occupations are free from sex-based undervaluation.

The pay equity assessment process allows us to look beyond what task someone is doing to understand and properly value their work.

Pay equity settlements are powerful vehicles for closing gender, Māori, Pacific and ethnic pay gaps, particularly for vulnerable workforces.

Equal Pay Act 1972 — New Zealand Legislation  

Te pūtake o ngā āputa utu me te rerekē o te utu Why pay gaps and pay inequity exist

Pay gaps affect many groups. Several factors contribute to this issue.

  • Bias and discrimination

    Bias and discrimination are based on deeply held societal beliefs about gender, ethnicity, work and family. They underpin all the other factors in pay gaps. For instance, a New Zealand study showed that women are just as productive as men but are paid less than their male counterparts. Wāhine Māori, Pacific women and women from ethnic communities face both ethnic and gender bias and are paid less on average than men in the same ethnic group.

    What drives the gender pay gap — Motu

    Empirical evidence of the gender pay gap in New Zealand — Ministry for Women 

  • The value placed on jobs identified as women’s work

    The skills, responsibilities, effort and working conditions required in female-dominated occupations are not recognised or valued in the same way as they are in other occupations. 

  • Work arrangements and caring responsibilities

    Women still take on most of the family caring work. More women work part-time or flexibly to balance their paid and unpaid work. Part-time work is more available in lower paid occupations and positions. As well, women are more likely than men to take parental leave, which can also reduce the rates at which they progress in their careers. Working flexibly can limit or slow down career progression.

  • Leadership and representation

    In the Public Service, women, Māori, Pacific people and members of ethnic communities are less likely to hold leadership roles. This is partly due to the impact of part-time work and career breaks on women’s career progress. But it also reflects gender and ethnic biases about what makes a natural leader.

  • The jobs women, Māori and Pacific people do (occupational segregation)

    In Aotearoa New Zealand, women, Māori and Pacific people are generally more likely to be employed in a narrow range of occupations and at the bottom or middle levels of an organisation. Māori and Pacific women are more concentrated in lower paid occupations than European women or Māori or Pacific men. This is occupational segregation.

    NZ’s high level of occupational segregation by gender, has a significant impact on women’s pay and lifetime earnings.

Kia Toipoto

Kia Toipoto is a comprehensive set of actions to help close gender, Māori, Pacific and ethnic pay gaps in the Public Service.

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