Frequently asked questions about pay equity
What is pay equity and how does it differ from equal pay?
The Equal Opportunity Act 1984 prohibits employers from discriminating against workers on the basis of gender. It does not allow employers to pay women differently from men who are doing the same job. Pay equity goes beyond this Act; however, there is no legal compulsion to enact pay equity in Western Australia. Employers have to address pay inequity voluntarily because it makes good business sense and is fair and equitable.
Pay equity is broader than comparing like-to-like jobs. It addresses the issues of:
- paying workers differently for jobs of comparable worth;
- the undervaluation of female dominated jobs and industries;
- employment conditions, such as the right to request part time work and the ability to balance caring and work responsibilities; and
- workplace cultures that inhibit women from advancing within an organisation.
How is the gender pay gap calculated?
The gender pay gap is the difference between the average female salary and the average male salary. It is calculated on the average weekly ordinary time earnings (AWOTE) for full time employees that the ABS publishes on a quarterly basis.
AWOTE does not factor in part time or casual earnings or income earned from overtime payments. See the About the Statistics page for more information on how the gender pay gap is calculated.
Why is the gender pay gap so much worse in Western Australia than the rest of the nation?
Western Australia consistently has the highest gender pay gap in Australia. There are many factors that may have contributed to such a big difference in the earnings of men and women.
There is no absolute answer to this question. What is known is that it is not solely due to the resources boom in this state as the mining sector employs less than 5 per cent of the total WA workforce and tends to replicate the average gender pay gap. Other sectors often have higher gender pay gaps than the average, such as the Finance and Retail sectors.
Obviously women earn less than men because they work part time and work fewer hours than men. Why do these suggestions not explain the gender pay gap?
The gender pay gap as mentioned above is based on full time earnings so the fact that more women work part time is not part of the calculation of the gender pay gap. It is also based on ordinary weekly earnings that do not take into account overtime earnings.
Is the gender pay gap caused by women choosing to take time out of the workforce to care for their families and not applying for promotion?
When discussing whether women choose to work part time, take time out to care for their families or not to apply for promotion, consideration needs to be given to a number of factors that might inhibit women participating equally in the labour market. Key considerations include the lack of child care and other family friendly workplace provisions, the lack of access to training and promotion opportunities for part time and casual employees, and other barriers that keep women from utilising their full potential.
The gender pay gap could be partially explained by women taking time out of the workforce and not being promoted as readily as men in organisations either because they do not apply for promotion as often as men or they are overlooked for promotion. However, several detailed analyses have concluded that even accounting for breaks in employment, there is still a considerable gender pay gap.
In the end, it is true that there are fewer women who reach the top positions in many organisations and this does have an impact on women’s pay and the gender pay gap. There is no easy answer as to why women are not reaching the top positions as readily as men in private companies and to a lesser degree in public agencies.
Will pursuing pay equity mean a pay reduction for anyone?
The solutions to the gender pay gap do not lie in reducing anyone's pay. Pursuing pay equity is about identifying barriers to equal participation and remuneration and removing them so that the workplace is fair and equitable.