New Zealand: New rules limit certain pay equity claims

Employer Action Code: Act

Amendments to the Equal Pay Act 1972 were enacted May 6, 2025, to address the government’s concern that the original legislation was not effectively identifying and resolving valid claims of the undervaluation of work performed predominantly by women. Under the amendments, all existing claims that have been raised with an employer or lodged with the court and have not been settled or determined will be discontinued; such claims can only be raised again if they meet the requirements of the new rules.

Key details

Changes include:

• Raising pay equity claims: New claims by an employee or union must be based on evidence that the work has been and is currently undervalued, and they must relate to work performed by a workforce that has been at least 70% female for the prior 10 years. Previously, claims could be raised if undervaluation was “arguable” and the workforce was at least 60% female
• Assessing claims: The claim assessment process will continue to involve information about comparators (with similar levels of skills, responsibility and experience) selected by the parties; however, the amendments tighten the rules for comparator selection to ensure that the comparators are closely related to the employer. Priority is given to comparators from the same employer; if none are suitable, comparators from similar employers or within the same industry sector can be used. If no suitable comparator is found, the claim cannot proceed. Previously, employers could only discontinue a claim by giving notice if there was not an arguable case that the claim related to female-dominated work that was, or had been, historically undervalued
• Resolving disputes and fixing remuneration: Previously, if the parties could not agree on a claim settlement and asked the Employment Relations Authority (ERA) to fix remuneration, the ERA could award back pay (which could not be phased in). The amendments remove the ERA’s ability to award back pay and allow the parties to agree that increases in remuneration from pay equity bargaining can be phased in. In addition, future review clauses in settled claims are no longer enforceable

Employer implications

In terms of overall pay gaps in New Zealand, women's hourly earnings were 8.2% below those of men as of June 2024 (government data). Employers should familiarize themselves with the new requirements around claims of undervalued work of predominantly female workers.

Contacts

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Nick Torjussen

Head of Health & Benefits, New Zealand

email Email phone +64 21 909 587

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Tamsin Sridhara

Global Pay Equity Lead

email Email

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