The pay equity claims process
Under the Equal Pay Act 1972, the pay equity claims process provides a practical and accessible way to raise and resolve pay equity claims.
|Level of compliance
The Equal Pay Act 1972 (the Act) outlines actions that need to be taken within set timeframes when a pay equity claim is raised. These timeframes do not line up with the school terms or the school year.
The 3 main stages of the pay equity claim process are:
- raising a claim
- assessing a claim
- settling a claim.
On 6 November 2020, amendments to the Act came into force. These made it easier for people to raise and resolve a pay equity claim.
The changes allow individual employees as well as unions to raise a pay equity claim directly with single or multiple employers using a framework that is aligned to New Zealand’s existing bargaining framework.
Claims raised by a union on behalf of its members
A union can raise a pay equity claim on behalf of its members who do work that is (or was historically) female dominated and there are factors that indicate the work is currently or has historically been undervalued.
The union can represent member employees who perform the same or substantially similar work across employers.
Non-member employees will still be covered by the claim unless they choose to opt out of the claim.
Claims raised by individual employees
An employee can raise a pay equity claim with their employer if they do work that is (or was historically) female-dominated and there are factors that indicate the work is currently or has historically been undervalued.
Acknowledging a claim
Once a claim is received, employers have 5 working days to notify:
- the claimant that the claim has been received
- any other union(s) whose members may be doing the same or substantially similar work for the employer.
Determining arguability of a claim
The next step in the claims process is for the employer(s) to form a view on whether the work of the claimant may be currently undervalued or has historically been undervalued. This is called determining ‘arguability’.
The Act gives employers 45 working days to do this.
Employers can extend the timeframe to decide if a claim is arguable if they have reasonable grounds. You cannot extend the timeframe by more than 20 working days for claims raised with a single employer, or 80 working days for union claims raised with multiple employers, unless all parties agree to a longer extension.
Agreeing a claim is arguable doesn’t mean that the employer(s) agree there is a pay equity issue or that there will be any settlement.
If the employer(s) do not agree, they must tell the employee or union of their reasons for this and explain the steps they can take to challenge the decision.
Once an employer has accepted that a pay equity claim is arguable, the parties must enter into the pay equity bargaining process with the employee or union who raised the claim.
Where a union raises a claim with multiple employers, the employers must enter into a single multi-employer pay equity process agreement. The agreement outlines how the employers will work together and make major decisions as a group.
It is important to note that a pay equity claim raised for a role in schools, such as the claim for school administration staff, doesn’t make it a multi-employer claim even though there are multiple schools involved. The Secretary for Education acts as the sole “employer” for the purpose of pay equity claims in schools.
The legislation allows for individual employers in multi-employer claims to opt-out of the claim for “genuine reasons” based on “reasonable grounds”. If an employer were to opt-out of a multi-employer claim, they would still need to complete the pay equity process with the representative union on their own.
In some instances, 2 unions or more may cover workers within 1 employer. The unions can raise a claim together.
If a union has already raised a claim, and a second union wants to raise a claim for the same work with the same employer, this must be consolidated.
Claims can be consolidated at any stage in the process until the first claim is settled. If the unions can’t agree, they can use the dispute resolution process in the Act.
The groups then carry out a gender-neutral assessment. This assessment includes:
- investigating the claimants’ work
- identifying and agreeing appropriate comparators
- investigating the comparators’ work
- comparing the work and remuneration of both claimants and comparators.
The Act sets out the matters to be assessed. The main purpose of the assessment is to find out whether the claimant is being paid less than the comparator because of their gender.
If the assessment process confirms this, then the parties move into negotiating a settlement that establishes rates of pay for the claimant.
Any agreement should be recorded in writing and will need to be ratified (agreed to) by employees covered by the claim if the claim has been raised by a union.
The outcome of any settlement, including new pay rates, cannot be determined until a claim has been fully assessed. This can take time to progress. The parties involved work together to ensure a thorough examination of all evidence gathered.
If, after the assessment stage, the investigation finds there is no gender-based discrimination, the claim is denied. If it finds there is gender-based discrimination, the parties negotiate a fair pay settlement.
The proposed settlement is shared with all employees covered by the claim, unless they have opted out of the claim. They vote on whether to accept the settlement. If it is accepted, the settlement is implemented and the new rates of pay offered to all people covered by the claim.
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