Equal Pay Act 1972

The Equal Pay Act 1972 is a core New Zealand employment law about sex-based differences in remuneration and some related employment matters.

For employers, the Act has two main pay rules. One is equal pay for employees doing the same, or substantially similar, work. The other is pay equity for work that is exclusively or predominantly performed by female employees.

The Act also deals with some non-pay issues. It prohibits sex-based differences in certain employment terms and opportunities, and it sets out claim pathways, notice rules, protections against adverse treatment, penalties, and enforcement tools.

The Act applies to employers and employees. It uses the Employment Relations Act 2000 definition of employee, and it binds the Crown.

In practice, most businesses with employees should assume the Act is relevant when they hire staff, set pay, review pay differences, promote staff, or respond to a complaint about sex-based treatment in pay or related employment conditions.

The Act is especially important for businesses with female-dominated roles, workplaces with union coverage, and employers that use discretionary pay-setting or role-based allowances.

Section 2AAC is the core pay obligation. An employer must ensure there is no differentiation, on the basis of sex, between the rates of remuneration offered and afforded to employees who perform the same, or substantially similar, work.

The same section also requires employers to ensure there is no sex-based differentiation between remuneration for work that is exclusively or predominantly performed by female employees and the rate that would be paid to male employees with the same or substantially similar skills, responsibility, and experience, working under the same or substantially similar conditions and with the same or substantially similar degrees of effort.

Remuneration is defined broadly. It includes salary or wages actually and legally payable, and also includes time and piece wages, overtime, bonus, allowances, fees, commission, and every other emolument, whether paid in money or not.

Section 2A is narrower than a general workplace equality rule. It does not cover every complaint about unequal opportunity by sex.

What it does say is that an employer must not, by reason of sex, refuse or omit to offer or afford a person the same terms of employment, conditions of work, fringe benefits, and opportunities for training, promotion, and transfer as are made available for persons of the same or substantially similar qualifications employed in the same or substantially similar circumstances on work of that description.

For a business owner, this means the Act can apply not only to pay rates, but also to how comparable employees are treated in these specific employment areas.

The Act is most likely to matter at practical decision points. These are the moments when inconsistent treatment can creep in, or when a concern becomes a formal legal process.

Do not wait until a claim is filed. The safer approach is to check your pay-setting and role comparison process before you hire, promote, or approve a pay increase.

The Act does not apply to an employment agreement that fixes a rate of remuneration that is special to an employee because of that employee's special qualifications, experience, or other qualities, if it does not involve discrimination based on sex.

This is important for businesses that pay one employee more because they bring unusual experience, scarce skills, or stronger qualifications. The exception is not a free pass. You still need to be able to show the higher rate is genuinely tied to those factors and not to sex.

In practice, if two employees do similar work but one is paid more, you should be able to point to a clear and consistent reason.

Part 4 sets out the pay equity claim framework. It covers who may raise claims, eligibility, merit, employer decisions, bargaining, information sharing, comparator selection, settlement, mediation, facilitation, Authority determinations, and records.

For most businesses, the practical point is to recognise when an issue has moved from an ordinary pay complaint into a formal pay equity claim under the Act. Once that happens, the Act has specific process rules and time-sensitive notice obligations.

The Act also distinguishes between claims raised by an individual employee and claims raised by a union. That distinction matters for coverage, notices, and opt-out rights.

The Act uses a specific definition of predominantly performed by female employees, and the definition is not the same in every part of the Act.

In Part 2, work is predominantly performed by female employees if it is performed by a workforce that is at least 70% female.

In Part 4, for work to which a pay equity claim relates, the work must be performed by a workforce that is at least 70% female and must have been performed by a workforce meeting that threshold for at least 10 consecutive years immediately before the date the claim was raised.

This distinction matters when you are assessing whether a formal pay equity claim can be raised under the current law.

Section 13C requires parties to deal with one another in good faith during the pay equity claim process. The penalty section also shows that some process duties are enforceable, including duties to enter into or resume parts of the pay equity process in certain situations.

Even without restating every procedural section, the message for employers is clear. Once a pay equity claim is underway, process conduct matters. Delay, refusal to engage, or failure to restart a required step can create legal risk separate from the final pay outcome.

Section 14A sets out notice rules, but the permitted method depends on who the notice is being given to. It is important not to assume every listed method applies in every case.

If a notice must be given to an employee who has not authorised a representative to act on the employee's behalf in respect of the claim, the notice must be delivered in person, sent by a form of electronic communication ordinarily used for formal communications, or notified in a manner specified in the employee's employment agreement.

If the claimant is a union, a notice required to be given to the union must be given at the union's address for service.

If a notice must be given to an employee's employer, it must be delivered in person, sent by a form of electronic communication ordinarily used for formal communications, or notified in a manner specified in the employee's employment agreement.

The Act contains detailed rules for union-raised pay equity claims. Affected employees can be automatically covered by a union-raised claim, and Schedule 2 sets out what certain notices to affected employees must include.

For a union-raised claim, the notice content is detailed. It includes the fact that a claim has been raised, how coverage works, opt-out information, the 20 working day period relevant to contact details being provided to the union, consequences of being covered, and a recommendation that the employee seek independent legal advice.

The Act also says employees who are not union members are not required to pay fees to the union to be covered by the union-raised claim or to have the benefit of a settlement offered to them.

Section 2B is the choice of proceedings rule. If the same circumstances would allow an employee to bring a claim under this Act, make a complaint under the Human Rights Act 1993, or pursue a personal grievance under the Employment Relations Act 2000, the employee may take one, but not more than one, of those steps.

The section also explains when an employee is treated as having pursued a claim under this Act. That depends on the type of claim and the stage reached.

For employers, this means early handling matters. You should identify the legal path being used and keep your communications consistent with that process.

An employer must not treat adversely an employee who raises or is covered by a claim under the Act, including an employee covered by a union-raised claim.

The Act gives examples of adverse treatment. It includes refusing or omitting to offer or provide the same terms and conditions of employment, dismissing the employee, subjecting the employee to detriment, or retiring the employee or requiring or causing the employee to retire or resign.

Detriment includes anything that has a detrimental effect on the employee's employment, job performance, or job satisfaction.

A claim for this kind of contravention is treated as a personal grievance under the Employment Relations Act 2000.

The current Act specifically refers to pay equity records in section 13ZZF. Older general record provisions in sections 17 and 17A are repealed.

That means you should not assume this Act creates a broad standalone record-keeping code for every pay decision. But from a practical risk point of view, good records still matter. They help you explain why pay differs, show that a higher rate is based on qualifications or experience rather than sex, and prove that notices and process steps were handled correctly.

Section 18 creates penalties for non-compliance with listed provisions. These include section 2AAC, section 2A, section 13C, certain duties to enter into or resume the pay equity process, and the duty to keep pay equity records.

The maximum penalty is $10,000 for an individual and $20,000 for a company or other body corporate. The Act also applies penalties to an employer who knowingly or recklessly fails to comply with the duty under section 13V to notify affected employees of a union-raised pay equity claim that the employer has decided has merit, or who provides misleading information in that notice.

A union may also face penalties for knowingly or recklessly failing to comply with section 13ZF(3).

An action for recovery of a penalty must be commenced within 12 months after the earlier of when the cause of action became known, or should reasonably have become known, to the Labour Inspector or employee concerned.

Labour Inspectors have, for the purposes of this Act, all the powers they have under the Employment Relations Act 2000, in addition to any powers conferred by this Act.

The Employment Relations Authority and the Employment Court also have all the powers and functions they have under the Employment Relations Act 2000 when performing functions under this Act or dealing with a breach of it.

For businesses, that means Equal Pay Act issues sit inside the wider New Zealand employment law enforcement framework. They are not just internal HR matters.

The Act was assented to and commenced on 20 October 1972. Major modern pay equity amendments were inserted in 2020. The current official version is as at 14 May 2025.

That 14 May 2025 date is important for two reasons. It is the date of the current version, and it is also the commencement date for the 2025 amendment provisions referred to in the Act notes and Schedule 1.

Schedule 1 says an existing pay equity claim is discontinued on the commencement date. Proceedings relating to an existing pay equity claim may not be commenced on or after that date, and undetermined proceedings are discontinued on that date, subject to the terms of the Schedule.

Schedule 1 also says this does not prevent a new claim that complies with section 13DA from being raised.

There is also a 10-year restriction. No pay equity claim may be raised within 10 years after the date of a specified pay equity claim settlement if the new claim would relate to employees and work covered by that settlement, unless the Authority or the court determines that the claim may be raised.

Review clauses are also affected. On and after the commencement date, a review clause has no effect, and a term or condition of an employment agreement based on a review clause has no effect. Some related proceedings are also discontinued to the extent set out in the Schedule.

This Act is detailed, especially in Part 4. Before acting, make sure you are looking at the right issue and the right stage of the process.

A routine pay complaint, a section 2A issue, an equal pay claim, and a pay equity claim do not all work the same way. The right comparison, notice method, and next step can change depending on which part of the Act applies.