8 Jun 2016

Pay equity 'could cost hundreds of millions'

6:16 pm on 8 June 2016

Paying staff higher wages under proposed pay equity guidelines is unaffordable, home care providers say.

A doctor holds an elderly woman's hand

Equal pay and pay equity are different, though related, issues. The latter affects industries such as aged care that are dominated by women. Photo: 123RF

The guidelines have been recommended by the Joint Working Group on Pay Equity.

If adopted, they would make it easier for women to file pay equity claims by allowing them to negotiate directly with their employers rather than going through the courts.

Employers have estimated it could cost hundreds of millions of dollars in extra wages if the working group's recommendations are enshrined in law.

They say they should not be the ones to bear the burden of the cost of pay equity, but rather that it's a matter that society as a whole needs to deal with.

The Employer and Manufacturers Association said New Zealand was behind the rest of the world, and the government needed to move quickly to adopt the recommendations.

Kim Campbell, Chief Executive of the Employers and Manufacturers Association.

Kim Campbell Photo: RNZ / Philippa Tolley

Chief executive Kim Campbell said equal pay was already covered by the law so that men and women in the same jobs were paid the same.

The issue of pay equity - where men and women in similar jobs were paid the same - had vexed governments and businesses for a long time and it could no longer be ignored, he said.

"We have types of employment, say dominated by women, let's say aged care, suggesting that their pay is somewhat lower than work dominated by men, let's say firemen," he said.

Mr Campbell said some industries would be hit harder than others.

The government would pay the most because it funded a lot of female-dominated sectors like aged care, he said.

"You could argue that those hundreds of millions of dollars are going to get recycled into society as consumption or saving anyway, but the alternative is the country ends in the next 10 years in court - and frankly we don't think the courts is the right place for this sort of thing to be dealt with."

Care providers: 'It's great... it's just paying for it'

The Joint Working Group on Pay Equity, which includes unions and employers, was set up last year after a rest home worker, Kristine Bartlett, won a court battle where she argued that her $14.32 hourly rate was the result of gender discrimination.

New Zealand Aged Care Association chief executive Simon Wallace said his sector was already negotiating pay equity for care and support workers as a result of the case.

"We've been around that table and negotiating in good faith to get a settlement in that case. The Joint Working Group on Pay Equity will certainly be helpful for employers in the wider economy and future pay equity claims."

Julie Haggie is the chief executive of the Home and Community Health Association, which represents employers of 20,000 home and support workers - mostly women.

The guidelines gave employers clarity but they would be costly, she said.

"Most of the workers in our sector are on minimum wage or close to minimum wage. If you're shifting that upwards, 21,000 workers and 10 million hours of support going in every year just to aged care, and you multiply that by just a few dollars, you start to get the sense of the money."

The size of the wage rise still needed to be negotiated but employers in the sector were already worried about who would pick up the tab.

"I think the government has put its hand up here and said 'we'll leave this settlement to negotiation'.

"We don't feel like we're completely on our own but there's a deep level of anxiety about the implications of the serious uplift in wages. I mean it's great for us, for our workers in terms of retention and recruitment, that would be great - it's just paying for it really."

Ms Haggie said most employers were already stretched financially and could not afford to pay higher wages.

"A number of them are already at a loss under the current rates. Our sector is so stretched there isn't enough money to even pay for other legislation which has come through, such as employment standards legislation.

"I think to expect any kind of response on pay equity is just not realistic."

Minister for Workplace Relations and Safety Michael Woodhouse would not say how much it might cost, or who would pick up the bill, if the guidelines were adopted.

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