CAER was commissioned by the Australasian Centre for Corporate Responsibility to collate the research for a new report, Gender Pay Equity and Australian Listed Companies – ASX100 companies’ commitments and disclosures related to gender pay equity, which is based on Australian Workplace Gender Equality Agency disclosures.
What is Gender Pay Equity?
Gender pay equity is achieved when women and men receive equal pay for work of equal or comparable value. A disparity between women and men’s pay is often referred to as the ‘gender pay gap’ or ‘gender pay inequity’. The gender pay gap refers to the difference in earnings between men and women, typically recorded as the difference between fulltime workers of different genders. In Australia today, the gender pay gap is 15.3% – more than in the UK (9.4%) but less than in the US (20%).
There are two fundamental causes of an observed gender pay gap: the first is a consequence of discrimination – either unconscious or conscious – leading to gender pay inequity, the second is an artefact of the composition of the workforce. A US Congressional report found that as much as 40% of the overall gender pay gap in the US may be due to discrimination. Compositional factors that contributed to the non-discrimination related portion of the gender pay gap highlighted in the report included:
- the under-representation of women in leadership positions
- the greater proportion of women working in lower-paying fields
- women being more likely than men to be the primary caregivers of other family members.
About the Research
CAER undertook research in two parts of for this project. In the first part we explore why gender pay equity is a material issue for Australian companies; it describes international norms and developments, Australian legislation and action undertaken by shareholders in the US.
The second part of the research uses publicly available data disclosed by companies to the Australian Workplace Gender Equality Agency (WGEA). We assess 91 of the ASX Listed top 100 companies (9 companies were not subject to WGEA disclosure requirements). Companies were analysed on the following:
- existence of a formal policy or strategy on remuneration for employees
- existence of Gender Pay Equity Objectives in policy or strategy
- whether a Gender Pay Gap Analysis was conducted
- if a Gender Pay Gap Analysis was conducted, were actions taken as a result
- whether the company has a CEO or board member signed up to the WGEA Pay Equity Pledge
It should be noted that the scope of this research entirely relies on the public disclosures made to the Workplace Gender Equality Agency in the 2016-2017 reporting period. Information is submitted by companies to the WGEA between 1 April and 31 May each year covering the preceding 12 months period. Typically disclosures are made public later in the calendar year (around November/December). At the time of research, disclosures due to WGEA in May 2018 were not yet publicly available.
Key findings include:
- It is rare for a formal policy and/or formal strategy to include transparency around pay scales and/or salary bands. Only 15 companies disclose that their formal remuneration policy and/or strategy covers pay scale transparency.
- Companies have been analysing their payroll to determine if there are any remuneration gaps between women and men. The research found that 87 companies undertook a gender pay gap analysis (95%).
- All up, 80% of companies have been taking actions as a result of their gender remuneration gap analysis. The majority of these actions included identifying the cause/causes of pay gap/s, however, many companies highlighted a wide variety of actions taken.
- Companies that have not taken actions regarding gender pay equity analysis, or actions post-gender pay equity analyses often justify inaction by stating salaries are set by awards/industrial or workplace agreements. Companies also disclosed that no action was taken as ‘non-award employees are paid market rate’.
- The majority of companies are not making any public commitments to gender pay equity. Only 24% of the ASX100 listed companies have a CEO or board member signed onto the Gender Pay Equity Pledge.
Cochlear, BT Investment Group, BHP Billiton, ASX Limited and Bank of Queensland all highlighted best practice examples of actions taken to address gender pay equity that went beyond mandatory WGEA disclosures.
For more information and to read the full report visit the ACCR website