Next month, the second release of the Workplace Gender Equality Agency’s gender pay gap data will occur, reflecting changes to what was published in the first release. An expert shares the changes HR practitioners and employers can expect.

In March 2023, the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill [2023] came into effect, enabling the Workplace Gender Equality Agency (WGEA) to publicly publish on its website the gender pay gaps of private and public sector employers with 100 or more employees. WGEA published the first set of private sector gender pay gaps in February 2024.  

In February this year, the second release of employers’ gender pay gap reporting will occur and, significantly, public sector employers’ pay gaps will be published for the first time. HR practitioners and employers should also be aware that additional information will be published this time around.

For the first time, CEO, head of business and casual manager remuneration will also be included in gender pay gap calculations. 

“In 2024 WGEA only published the median pay gaps for base and total remuneration, whereas from now on they will also be publishing the average,” says Vanessa Paterson, CEO and Principal Consultant at Checksfield Consulting, Consultant with Diversity Partners and former executive manager at WGEA. 

“Considering that nearly 80 per cent of Australia’s CEOs are men, the CEO’s salary will likely make the average gap larger, but it will give a more accurate representation of the gender pay gap. This is an important piece of information that describes whether or not gender equality is occurring at the most senior level in organisations.”

In the first round of publishing gender pay gaps, WGEA published gaps by submission group (i.e. aggregated the gaps of all entities in the report submission). However, in 2025, all relevant employers will have their pay gaps reported individually.

“There are high-performing subsidiaries and there are low-performing subsidiaries. Aggregate their gaps and suddenly, the lower performer doesn’t look so bad. Now, with this change, there can be no masking of those gaps enabling employers to direct their efforts in a more targeted and precise way.”

Paterson clarifies that while the Workplace Gender Equality Act (2012) refers to ‘relevant employers’ as those with 100 or more employees, it also allows for fluctuations in the workforce. 

This means employers must continue to submit a gender equality report to WGEA until their workforce (or the total number of employees in their group) falls below 80 employees. A relevant employer can be a standalone company, a corporate group or a subsidiary of a corporate group.

Why this should be about more than compliance

Reducing the gender pay gap is beneficial for Australia’s broader economic performance, says Paterson.

“There’s a lot of research that shows that closing the gender pay gap directly enhances an organisation’s performance and impacts economic growth more broadly,” she says.

“Internationally, particularly in the UK, we’ve seen that increasing transparency and the visibility of employer pay gaps accelerates progress in workplace gender equality because it builds accountability.

“We also know that transparency [around gender pay gaps] builds trust, supports better employee morale and increases employee satisfaction and performance.”

Paterson says the publication of organisations’ gender pay gaps is also a huge motivator for organisations that may not otherwise see gender equality as a priority.

“It motivates employers to at least think about what’s driving their pay gap and to then do something about it.” 

A key part of reflecting on an organisation’s gender pay gap is to consider some of the ways that it might be misunderstood in an organisation, says Paterson.

“It often gets confused with pay equity or equal pay, which is where employees who are doing the same or comparable work are paid the same. When we talk about the gender pay gap, it’s a measure of the collective earnings of women and men across all roles in an organisation.

“Ultimately, the key drivers we’re talking about are the higher representation of men in higher-paid roles and in leadership positions, and the higher representation of women in lower-paid roles, and there’s lots of things that influence that.”

“When dealing with the media, you absolutely want to be proactive. Don’t wait for them to look for your pay gap once it’s published.” – Vanessa Paterson, CEO and Principal Consultant at Checksfield Consulting, Consultant with Diversity Partners and former executive manager at WGEA

Overcoming gender pay gap reporting challenges

Reporting on your organisation’s gender pay gap efforts can be a complex task.

“For the data to be meaningful, it needs to be comparable. That’s why WGEA asks employers to report pay data in a standardised way across standardised manager and non-manager categories. What that means is that in some instances, employers have to tailor their systems to match WGEA’s format.

“For example, your business might have a different way of defining the role of a manager, so you need to do the upfront work to align your roles with WGEA’s definitions.” 

Employers then also need to consider where they may need to make adjustments to ensure accurate data is reported to WGEA, she adds.

For example, to make sure the pay gap doesn’t just reflect that women are more likely to work part-time hours, employers need to convert their base salary and total remuneration to full-time equivalent amounts (for part-timers and casuals as if they had worked full time), and annualise salaries for those who’ve been with you for less than 12 months (as if they had been employed for the full 12 months). Then you’re comparing apples with apples.

“You need your systems to be set up to do this, which can be a little bit challenging.”

But WGEA has created a free single-touch payroll (STP) template that performs these calculations to help employers with that conversion, she adds.

It’s also important to make sure you understand what industry you should be in, and double-check it’s correct when completing your report.  

“If you’re in the wrong industry, you’re going to either look better than you should or worse than you should, which could misdirect the strategy you implement [to rectify any issues].”

Gender pay gap reporting can be time-consuming and complex to get right in the first instance, but it’s worth putting in this effort up front, says Paterson. It can also help to collaborate with others.

Sometimes, the issue of gender pay inequality is more far-reaching than a localised issue within an organisation – it’s often an industry-wide issue.

“It’s worth considering how you can collaborate at an industry level to resolve the issue to everyone’s benefit – men and women. Years ago, an abattoir reported to WGEA that women were experiencing carpal tunnel syndrome at a higher rate than men.

“As an industry, they got together to determine how to fix this. So they invested in different types of machinery and automation to help. 

“Industry collaboration is a really important thing, particularly for gender-segregated industries when you’re trying to attract more women [if you’re in a male-dominated industry], but also when you’re trying to attract more men [if you’re in a female-dominated industry].”   

Developing data literacy

Another challenge some businesses face is around a lack of appropriate data literacy.

“Data analysis is key to being able to direct your efforts so they’re more effective and ultimately less costly. Knowing the type of analysis to undertake and what variables to consider helps you determine the strategy and action plans that you develop,” says Paterson.

This helps employers go beyond superficial data analysis.

“If you take a superficial approach to the data, you might see that you’ve got 50 per cent of women in management and think, ‘We’re doing okay.’ But actually, when you look at your entry-level management, it’s 65 per cent women versus senior management which is only 15 per cent. 

“It’s about knowing where to dig deeper. What are our promotion histories looking like? Are they favouring men? To what proportion? Are women at different levels exiting at higher rates than [others]? This level of analysis requires expertise to do properly.”

Brush up on your data literacy skills with this short course from AHRI – the foundations of people analytics and insights. AHRI members can access the course at a discounted rate.

With the right data and informed analysis, employers can then create intentional strategies that align with their business’s reality.

“Your organisation’s gender pay gap is a point-in-time lag indicator which reflects the many lead indicators that influence it – [such as] your approach to flexibility and part-time work so carers can participate in leadership while balancing their caring responsibilities, et cetera. We need to make sure we implement lead indicators that are evidence-based and that will drive sustainable change and reduce the gender pay gap over time.

“It’s important to be realistic and communicate transparently about the causes of your gender pay gap and what you’re doing to reduce it. The irony is that sometimes a great employer may take a lot longer to change because they have very low turnover. 

“If your business isn’t experiencing growth then you’ve got to wait for natural turnover to occur before being in a position to recruit or promote someone to achieve gender balance, which can take time.” 

Transparent conversations

If your organisation has a gender pay gap, it’s best to communicate it transparently and authentically.

Paterson uses the example of the accompanying employer statements linked alongside each organisation’s gender pay gap on WGEA’s website. This enables organisations to provide further context and information about what their gender pay gap is, the causes of their gap and what they’re doing to eliminate it. The employer statements are voluntary, so many organisations opt not to provide them.

“If you don’t provide an accompanying statement to explain your gender pay gap and what you’re doing about it, there’s a vacuum of information that will get filled with everybody else’s assumptions and misunderstandings. It’s really important that organisations own their own narrative.

“In addition to providing an employer statement that can be accessed by all stakeholders, create tailored and considered messaging for different internal cohorts – for example, the board is going to want different information to employee groups. 

“You’ll want your managers to be able to answer questions asked by their teams in a transparent and knowledgeable way. When dealing with the media, you absolutely want to be proactive. Don’t wait for them to look for your pay gap once it’s published. 

“This is why adequate preparation is a must,” she adds. “Do the work and analysis now, so you know what your data is telling you. The key to your communication is a commitment to change.”

The publication of gender pay gaps isn’t about naming and shaming, says Paterson. It should be seen as a call to action.

“Employers already know their gender pay gaps – they’ve already received that information. Now it’s about what they’re going to do about it. 

Rather than worrying that information about your pay gap is going to lead to some bad press, focus on what you can control: your response and your actions. 

“I’ve worked with employers where their pay gap is well in excess of the national average.  Some of that might be a legacy issue of operating in male-dominated sectors or roles, but miscommunication and misunderstanding are much more likely if you’re not clear.”

That’s why it’s so important to create an intentional strategy that works for your unique business needs, she says.

“I’ve seen an employer who had way more women in the lowest-paid quartile than their competitors. On the surface it looked like they’re getting all these women to work in admin and paying them less.

“But what they were actually doing was far more strategic. It was a deliberate strategy to get more women coming into the organisation at entry level, particularly in specialised roles where women are under-represented in the marketplace, and as they progress their careers and move through the organisation, they work their way into these higher-paying roles.” 

This did increase the organisation’s pay gap, but they owned it. They knew this was good for gender equality and for the business, and that over time they would see their pay gap reduce. This demonstrates how important it is to be strategic rather than ad-hoc about actions you take, and being transparent about your strategy with all your stakeholders. 

“It’s really important to do the work, do the analysis and know what the cause of your gender pay gap is. The more you know, the more you understand your data, the more you communicate your plans, the more you will be able to be authentic and honest with your stakeholders. 

“It’s really important to know that no one has all the answers. Everyone is on a journey, which is why we need to do what we can to help each other.”