How would Labour’s proposed gender pay gap policy impact NZ tech industry?

Proposed Labour legislation requiring organisations to publicly report their gender pay gap is expected to impact only the biggest players in the technology industry from the outset, should the proposal be passed through parliament.

At this stage, organisations with more than 250 employees will be required to publicly report their gender pay gap, which equates to approximately 900 entities in New Zealand.

Specific to the technology industry – and based on employee data sourced from LinkedIn – likely companies impacted will be telecommunications giants, consultancy firms and a handful of technology providers, vendors and distributors.

Namely, Spark – which is already committed to voluntary reporting – as well as One New Zealand, 2degrees, Chorus and Kordia. This is in addition to Datacom, Fujitsu, Computer Concepts Limited (owned by Spark), DXC Technology alongside Deloitte, KPMG, PwC, EY, Capgemini and potentially Accenture.

Other players impacted based on local headcount could include Microsoft, Amazon Web Services (AWS), HP, IBM and Ingram Micro, plus peripheral industry players such as Xero and MYOB.

Should the legislation be passed early next year – pending a general election and the bill being tabled in parliament – the framework is then expected to include organisations with over 100 workers within the space of four years. This would span almost 2700 entities across the country.

Notably, a sizeable proportion of the tier-2 technology partner ecosystem – housing value-added resellers, managed service providers and system integrators – currently have headcount fluctuating between 80-150 employees.

According to Statistics New Zealand, the local technology sector is made up of over 20,000 firms – most of which are small businesses – and combined, they employ over 114,000 people.

Based on that, the reality is that approximately 20-30 organisations out of 20,000 would be impacted on day one should the legislation be tabled and passed.

“The reality is that women have different experiences in the workplace than men and change is needed,” said Jan Tinetti, Minister for Women. “Requiring companies to publish their gender pay gap will encourage them to address the drivers of those gaps and increase transparency for workers.

“This move is part of the government’s ongoing commitment to make New Zealand an equitable and desirable place for people to live, work, and do business.”

As noted by Tinetti, countries such as Australia, Canada and the UK have already introduced gender pay gap reporting with a Labour government keen to emulate such policies in New Zealand.

“We need to ensure we’re staying in line with international standards to attract highly skilled women to New Zealand and do what’s right as an inclusive and forward-thinking country,” Tinetti added.

Priyanca Radhakrishnan – Associate Minister for Workplace Relations and Safety – said action plans will be voluntary at the start and will be reviewed after three years to determine whether it needs to be made mandatory.

The plan will also introduce a reporting system early in the process to ensure “wide ranging input” from stakeholders to inform the design of the system before legislation outlining the system is drafted.

“The government is also committed to exploring the inclusion of ethnicity in pay gap reporting as Māori, Pacific peoples and other ethnic groups often face the compounding impact of both gender and ethnic pay gaps,” Radhakrishnan outlined.

“Through this next phase of consultation we’ll be able to consider the inclusion of ethnicity before legislation is drafted.”

A spokesperson for the National Party, Nicola Grigg, said she supported a requirement for large companies to report on their gender pay gap. But strong opposition came in the form of the ACT party.

“Jan Tinetti and Priyanca Radhakrishnan, neither of whom have any familiarity with the private sector, want to add to the burden of red tape and regulation faced by businesses,” said David Seymour, Leader of ACT.

“This is in addition to axing 90-day trials, so-called ‘fair pay’ agreements, massive hikes in the minimum wage, increased sick leave, a new public holiday – the list goes on.

“Is there no limit to the red tape and compliance costs the unionists and ex-bureaucrats in the Labour Party are willing to load up on businesses? Forcing businesses to report on the gender pay gap is a distraction.”

According to the 2023 Global Gender Gap Index – published by the World Economic Forum and analysed by Moxie Insights – no country has yet achieved full gender parity, although New Zealand is among the top nine countries in the world to close at least 80% of the gap.

Specifically, New Zealand ranked as the fourth most progressive country on the planet on this issue, closing 85.6% of the gender gap, behind only Iceland (91.2%), Norway (87.9%) and Finland (86.3%). The country has also gained five percentage points during the last five years.

“With parity in parliamentary positions, and a female head of state for 16 of the last 50 years, New Zealand has the world’s third-highest level of parity on political empowerment,” the report stated.

As noted by the World Economic Forum, New Zealand has bridged the gender divide in enrolment across all levels of education and literacy rate. In terms of economic participation and opportunity (73.2%), there remains a 12.5% gender gap in labour-force participation.

“Estimated earned incomes of both men and women have been increasing since 2006, but men’s income increased at a higher rate than that of women, worsening the gap (score 64.2%) by four percentage points since,” the report added.

On health and survival, Kiwi women have lost three years of healthy life expectancy since the 2020 edition, reducing parity on the subindex (score 96.6%).