Have you encountered the term ‘gender pay gap’ and wondered what it means?
We’ve got you covered.
With recent updates that impact how businesses report on pay across their staff, we thought it’d be a great time to cover what the gender pay gap means and what it looks like in Australia.
Let’s dive in.
What is the Gender Pay Gap?
The gender pay gap indicates how we value the contributions of men and women in the workplace. It’s a measurement expressed as a percentage or dollar amount that shows the difference between men’s average earnings and women’s average earnings.
It’s different from equal pay, which seeks to ensure those in the same roles are paid equally. The gender pay gap is calculated across industries to demonstrate the often huge discrepancies between how much men and women take home financially.
Closing the gender pay gap is essential for Australia’s economic future and will help ensure a fairer, equal society for all.
What Causes the Gender Pay Gap?
The gender pay gap is not just caused by women simply being paid less in the workplace – a range of factors contribute to why women earn less in the first place.
Some of these factors include:
- Bias in hiring processes and pay decisions that favour men.
- Female-dominated industries commanding lower wages in general and less room to progress.
- Lack of flexibility in workplaces that allow women to take senior roles while having care responsibilities.
- More women in part-time roles.
- Women spending more time out of the workforce for parental and care duties.
- Women being discouraged from applying for management or leadership roles.
What is the Gender Pay Gap in Australia?
Australia’s national gender pay gap is currently 14.1%, according to the Workplace Gender Equality Agency (WGEA).
In financial terms, this equates to women earning $263.90 less than men each week, on average, across all industries and occupations.
The gender pay gap is higher in some states, like Western Australia, which has the highest gap at 22.4% and lower in others, like South Australia, at 7.4%.
These differences are often associated with the dominant industries in those areas. WA’s main economies that generate the full-time workforce are mining and construction (typically male-dominated industries). In South Australia, the public sector workforce is higher than in other states, with a more balanced gender representation and a lower pay gap.
What are the Recent Changes Impacting the Gender Pay Gap?
Following the Federal Government’s Jobs and Skills Summit in September 2022, several new policies have been introduced to encourage companies to close their gender pay gap.
Previously, companies had to report whether there was a gender pay gap within their organisation, but they didn’t have to report what it was or what they were doing about it.
The Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 came into effect this month. New requirements stated by the bill mean:
- Businesses with 100 employees or more will have to report their gender pay gap to the WGEA publicly.
- The Australian public service will be required to report to WGEA and set targets that actively improve the gender pay gap across the sector.
Previously, organisations could add a ‘secrecy clause’ to employee contracts meaning staff could not discuss or reveal their salaries to others in the organisation. Following last year’s Summit, this will also be removed as an acceptable practice.
The Gender Pay Gap: Time for Change
While there is still more work to do in this space, these new requirements are a significant step in the right direction.
It will encourage more workplaces to think consciously about the gaps in their organisations – and to put in place the proper mechanisms to close it for good.
Here at Explore Careers, we’re always working to ensure those we partner with offer fair, equal, and inclusive workplaces across the board.
Look out for the logos across our employer profiles that indicate the priorities and values of that workplace.
