About 2000 large Australian companies would be required to meet at least three gender equality targets as part of new legislation that will tighten the requirements for companies looking to secure government contracts.
Under the legislation, introduced by Assistant Minister for Women Kate Thwaites on Wednesday, employers with more than 500 employees will need to select three targets out of six options that aim to improve the state of gender equality in their workplace.
These targets include a focus on the gender makeup of boards and the workforce, their gender pay gap, flexible working arrangements, workplace consultation on gender equality and efforts to prevent and address sexual harassment.
Companies will be able to work towards meeting these targets for a period of three years before they are assessed. If companies do not achieve their targets in this period, they will not receive a certificate of compliance which means they would be ineligible to procure government work and contracts over a certain threshold.
Their record would also be published publicly by the Workplace Gender Equality Agency (WGEA).
“The government’s purchasing power is worth $70 billion each year, so that’s a significant lever for us to be able to use to say to these companies that we want to work with you to make sure that you’re making your company more equal for women,” Thwaites told Women’s Agenda on Wednesday.
“We’re using an economic lever there to try and say to businesses who we know want to do this work, that this is something that the government is taking really seriously.
“We want to work with you. WGEA is here to support you, to make sure that you’re taking the next steps in making your workplaces more equal for women.”
Thwaites said these new measures will not come as a surprise to big business, noting WGEA has been doing a “lot of work” with employers in recent years to recognise these issues. Earlier this year, WGEA published the gender pay gaps of more than 5000 firms for the first time.
“For these large companies, they are already required to collect data on these types of measures. So really, what we’re saying is, ‘you’re doing the work to see what the problem is. We now want to help you do the work to fix the problem’,” Thwaites said.
Statistics from the latest WGEA scorecard, published today, show that 100 per cent of occupations currently have a gender gap gap in favour of men.
Australia’s total remuneration gender pay gap is 21.8 per cent, with the salaries of CEOs and heads of business included in the figure for the first time.
This means for every dollar a man earns, his female counterpart earns 78 cents. In other words, women, on average, earn $28,425 less than men each year.
At the CEO and head of business level, the gender pay gap is 27.1 per cent – the largest of all manager categories.
Thwaites said this significant pay gap among CEOs and heads of business was one of the reasons the federal government was introducing its new legislation today that requires larger companies to set and meet gender equality targets.
“We know that it is super important to have women in leadership roles. The research and evidence tells us that it benefits companies to have women in leadership roles,” Thwaites said.
“What we do know is that when women are CEOs, they are often CEOs in companies that might be smaller or in the not-for-profit sector, rather than in the big financial firms, which obviously provide much higher salaries to their CEOs.
“So there’s more work to be done, but this is why we have WGEA doing this work of both collecting the data and working with companies to go that extra mile and do this extra work on making our workplaces more equal.”