Women should not be paid less than men – it's that simple
Australia's federal government has proposed new laws so employees can discuss their pay without fear of retribution, hoping the gender pay gap will begin to close. The clauses often conceal gender pay discrepancies and are written into contracts prohibiting employees from discussing their salaries with their peers. The absence of transparency is a barrier to women of all ages. Although a ban on the secrecy clauses would not see the end of the gender pay gap, the reform would be significant in the battle to do so. The industrial relations reforms will be introduced by the end of October. The Workplace Relations Minister Tony Burke has indicated that he’d like the laws passed by the end of 2022 despite concerns from various business lobby groups.
Empowering Women
Unions have argued that pay transparency will empower women, particularly in low-paid professions such as aged care, allowing them to group together to negotiate a comprehensive multi-workplace agreement covering conditions and pay. It appears likely that the government will introduce a contentious proposal for multi-employer bargaining. However, there are concerns that this will lead to widespread shutdowns and strikes. There appears to be undue haste to push forward proposals for multi-employer bargaining. Legislation is expected to include changes to the Better Off Overall Test, BOOT, which sits over workplace agreements. BOOT has been cited as a restrictive and considerable reason for the decline in enterprise bargaining in recent years.
In many countries, restraint clauses are widespread. One in five workers in the United Kingdom is banned from discussing pay with their colleagues. Under US law, employees can discuss their compensation and there are anti-gagging clauses in 21 states prohibiting employers from requesting historical salary history information to prevent discrimination.
Private Pay Gap
The gender pay gap is higher in the private sector than in the public sector. In order to reduce gender pay disparity in the public sector, the bill should contain elements that promote the establishment of classifications. Transparent classifications will help create a more generalised culture discussing pay and work value. Banning pay secrecy is a significant step that will benefit millions of women. Currently, employers can hide discrimination. The new laws should ensure that employers include pay scales, remuneration and bonuses in their job advertisements to expose the gender pay gap and encourage the same remuneration for women and men in comparable jobs.
The European Union is considering whether or not to make salaries public following data from the European Commission, where research shows that the gender pay gap in the EU is 14.1 per cent. Watertight policies, similar to those proposed by the European Commission, could instigate large-scale accountability and progress. Companies must be prepared to have some tough conversations, but it will create a much better world for European job seekers.
Transparency
Pay transparency encourages minimal turnover for those that are a good cultural fit. In 2018, California was the first state in the United States to pass a mandatory pay transparency statute. Since then, numerous other states and cities have followed suit. The U.K., Germany, and Ontario, Canada, have already passed similar legislation. The legislative transition will be difficult, and there will be an increased burden on organisations as they adjust to the new metrics and accountability.
According to HEC Paris Business School, imposed salary transparency could help dramatically reduce the gender pay gap. Large-scale salary transparency is already taking place in Iceland. Companies with over 25 employees must prove that they pay equally for work and correct any pay equity gaps. When they pay equally, they receive certification. The Canadian government implemented a similar scheme in 2021, intending to correct all pay equity gaps by September 2024. Transparency creates better team dynamics and gives a better indication of market salaries, ensuring employees are at the top of their position.
Governmental Proposals
Liberal Senator Simon Birmingham told the ABC he was concerned about the impact the proposed changes might have on small businesses, particularly concerning collective bargaining. He says, "We'll be looking to test with the business community whether they've actually achieved consensus or whether this is … just providing what the union movement wanted without consideration of the needs of small businesses and how some of these reforms could impact them. There has never been any discussion around what exactly is being proposed because employers haven't been told what's being proposed”. There is deep frustration among employers who feel uninformed about the government’s proposals.
A senate committee released a report that includes eight urgent recommendations for improving the balance between work and care. Recommendations included that the Department of Employment and Workplace Relations investigate law reforms to support flexible working arrangements and protect workers outside their contracted hours.
Mind The Gap
Closing the gender pay gap is an essential objective for senior ministers to close the gender pay gap and better support women in female-dominated professions by banning secrecy clauses so companies cannot prevent their employees from discussing their salaries. By banning specific clauses, women will be empowered by the improved transparency concealing gender pay discrepancies.
The Fair Work Act will introduce the Equal Remuneration Principle, making gender equity its central aim making pay increases easier for workers in low-paid female-dominated industries. The new legislation will establish two Fair Work Commission panels on pay equity and the care and community sector. The government will announce further measures from the Secure Jobs, Better Pay Bill before its introduction later this month.
