2. Pay equity implementation 3. Effective pay equality and pay equity legislation. ➢ Pay equality for low paid female carers The Commission recently completed a major national inquiry into equal employment opportunities in the aged care workforce, Caring Counts, Tautiaki tika.37 Up to 20,000 women in New Zealand are working in aged care as homecare support workers or in residential facilities. They are receiving very low wages (often the minimum hourly rate of $13.50 to $14.50) which is $2 to $5 less per hour than carers doing the same work in New Zealand’s public hospitals. The pay parity issue is a gross anomaly in that public funding is being used by District Health Boards to fund their own employees at a higher rate than is paid by community and private providers who are contracted by District Health Boards to provide the same service in residential facilities and in the homes of older people. In other words on one hand the boards directly employ the women and on the other they funnel public money through contracts to other providers. While the Government has acknowledged the pay inequality, it says it cannot afford to fix the problem in the current financial climate but will look at it when the country’s financial accounts are again in surplus38. The Commission’s inquiry report included financial modelling of the fiscal impact of pay parity at approximately $140 million a year, less than 1% of the overall health budget. The Commission recommended that the Government directs District Health Boards to develop a mechanism to achieve pay parity and that it is implemented within a stepped programme over the next three years. The Commission reported that the funding model being used by the State party is driving the employment model in the aged care sector and that pay equality needs to be seriously addressed in light of New Zealand’s ratification of international treaties affirming gender equality and pay equality and pay equity. The Guiding Principles on Business and Human Rights adopted by the United Nations General Assembly last year indicate that state parties cannot “contract out” of equal pay, pay equity and equal employment opportunities. They state: “States should exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights.”39 ➢ Pay equity implementation, specifically in the public sector (Article 11(1)(d)) Statistical data shows that New Zealand has had the smallest increase in median hourly earnings in the past 11 years, demonstrating sluggish growth and a jobless recovery. The gender pay gap has narrowed to 9.6 % with the ratio of female to male median hourly earnings in the June 2011 quarter at 90.4% up from 89.4% in the June 2010 quarter, the highest level since 1997. The ratio of female to male hourly wage and salary earnings for those in full-time employment also recorded its highest level since the survey began, at 95.8% in the June 2011 quarter40. At an aggregate level, the gender pay gap appears in times of slow growth to be tracking downwards, which may be a positive movement for some women. However, caution is required for several reasons. Statistics New Zealand warns that changes in income may be influenced by one-off events such as the change in the adult minimum wage by 25 cents an hour from April 2011, given that more 37 Caring counts, Tautiaki tika. New Zealand Human Rights Commission 2012 accessible at www.neon.org.co.nz Government won’t increase aged care pay, 3 News, http://www.3news.co.nz/defaultStrip.aspx?tabid=213&articleID=255740. Accessed on 13/06/2012 39 Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, A/HRC/17/31.21 March 2011 40 Statistics New Zealand, New Zealand Income Survey, June 2011. Released on 6 October 2011 38 Page 13 of 35