An amendment to the Equal Pay Act 1972 was passed by Parliament under urgency on 6 May 2025, with the changes coming into effect on 14 May 2025.

The Government, led by Workplace Relations and Safety Minister Brooke van Velden, stated that the previous legislation led to broad claims without sufficient evidence of undervaluation, undermining the purpose of the legislation. Minister van Velden stated that amendments are intended to ensure that only genuine pay equity issues are identified and addressed, reducing significant costs to the Crown associated with large public sector settlements.

Key Changes to Equal Pay Act 1972

The amendments introduce several critical changes that redefine how pay equity claims are raised and resolved:

  1. Stricter Criteria for “Female-Dominated” Workforces  – The threshold for defining a workforce “predominantly performed by female employees” has been raised significantly. Previously, a workforce needed to be approximately 60% female; the new requirement mandates that the workforce be at least 70% female and have maintained this percentage for 10 consecutive years before a claim is raised. This higher bar has resulted in the discontinuation of many existing claims that previously met the 60% threshold.

  2. A New Hierarchy of Comparators – A new, stricter hierarchy for selecting comparators has been introduced. The primary focus is now on comparators from the same employer. If none are suitable, comparators from similar employers or within the same industry can be used. Claims cannot proceed without an appropriate comparator, excluding those from different industries or sectors, due to difficulties in determining if pay differences are sex-based.

  3. Discontinuation of All Existing Claims – One of the most contentious impacts of the new Act is the discontinuation of all 33 existing pay equity claims. While new claims can be raised under the amended Act, they must meet the new requirements. Several groups, including the PSA Union, have considered ways of opposing the Amendment, calling it “unconstitutional” and an “attack on women.”

  4. Adjustments to Settlements and Review Processes – The Act introduces new provisions regarding settlements. Employers now have wider grounds to discontinue a claim if they consider the work is not substantially similar to the comparator workforce. Furthermore, while settlements can be phased in over a maximum of three years, the Employment Relations Authority’s ability to award back pay has been removed. Review clauses in existing settlements are no longer enforceable, and settled claims can only be re-raised after 10 years.

Implications for New Zealand Businesses and Workers

These changes narrow the scope of pay equity claims but arguably provide employers with greater clarity and tools to contest broad claims. While proponents argue that the Amendment will enhance certainty and sustainability, critics view the discontinuation of existing claims and the heightened criteria as a setback for workers’ rights and the ongoing effort to address systemic gender-based undervaluation.

The amendments to the Equal Pay Act 1972 signal a significant shift in New Zealand’s approach to pay equity, emphasising evidence-based assessment and employer sustainability within the resolution process.

 

The first step in getting support is to talk with a lawyer from Frontline Law about your situation and see what options we can offer you. Contact Frontline Law for a free initial consultation.

*The information in this blog post is general in nature and is not legal advice. If you need advice, you should contact us about your specific situation.