Fair Pay Agreement Bill has been passed into law.
Update on Fair Pay Agreement
The Fair Pay Agreement (FPA) system introduced into Parliament on 29 March 2022 received Royal Assent on 1 November 2022. It’s been passed into law.
The Ministry of Business, Innovation and Employment has published relevant information:
- Fair Pay Agreements page (Employment New Zealand website): Fair Pay Agreements » Employment New Zealand
- Overview of the FPA system: The Fair Pay Agreement system (employment.govt.nz)
- Info sheet for employees: Understanding Fair Pay Agreements - A quick guide for employees (employment.govt.nz)
- Info sheet for employers: Understanding Fair Pay Agreements - A quick guide for employers (employment.govt.nz)
- Updated information on the MBIE website: Fair Pay Agreements | Ministry of Business, Innovation & Employment (mbie.govt.nz)
The Fair Pay Bill was originally designed to set out industry or occupation specific minimum employment terms (pay and conditions) which include minimum wage rates, ordinary hours, overtime, and penalty rates. Amendments proposed and accepted by the Government require FPA to also establish “the arrangements for training and development” of covered employees, and their leave entitlement. Although mandatory training requirements could be tougher on small and medium-sized businesses, these obligations would not necessarily put them at a disadvantage. Training and development needs vary across industries and occupations, and it will be up to the bargaining sides to settle on practical L&D term that best fit these needs.
Pay Equity and Pay Transparency
- Record low gender pay gap of 7.7% in the public service
- Over 55% of public sector senior leadership roles held by women
- Māori pay gap in the public service lowest ever at 6.5%
- Pacific pay gap in the public service 17.7%
- Progress on Pacific and Asian pay gaps have been slowed down but increasing diversity in the Public Service, with higher numbers of Pacific and Asian people among younger public servants who tend to be lower paid
However, the gender pay gap in New Zealand overall is still at 9.1% and the ethnic pay gap is even worse. There has been an urgent call from employees, businesses, unions, community groups, and the Human Rights Commissions to Government to take immediate action on closing the pay gaps. There is an increasing level of consensus that pay transparency legislation will change people’s lives for the better.
Mind The Gap has launched a campaign for laws that would make gender pay gap reporting mandatory for all employers within both the private and public sectors. A petition with 8000 signatures has been delivered to Parliament.