The Government has announced a $2 billion package to address the gender pay gap in the aged care sector.
The deal will see more than 55,000, mostly female workers, receive a minimum pay rise of $4 and hour going up as much as $7 an hour in some cases.
The pay increase will cost the Government more than $2b over the next four years. For the workers, it won’t be backdated but will take immediate effect on June 1.
Health Minister Jonathan Coleman said the “dedicated and predominantly female workforce” who were mostly on or around minimum wage would receive a pay rise between around 15 and 50 per cent depending on their qualifications and or experience.
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“For the 20,000 workers currently on the minimum wage of $15.75 per hour, it means on July 1 they will move to at least $19 per hour, a 21 per cent pay rise. For a full-time worker, this means they will be taking home around an extra $100 a week, which is over $5,000 a year.
“For these 55,000 workers this funding boost will see wages increase to between $19 and $27 per hour over five years. Existing workers will be transitioned to positions on the new pay scale which reflect their skills, and their experience,” Coleman said.
The settlement would be funded through an increase of $1.856 billion to Vote Health and $192 million to ACC. Coleman said ACC levies were already set for the coming years, “but may possibly increase over the next decade to support this”. “However, that is not definite. There may also be an increase in costs for people in aged residential care facilities, whose assets keep them above the subsidy threshold.” That would be determined through the annual Aged Residential Care contract negotiations.
An aged residential care worker on the minimum wage of $15.75 per hour, with three years’ experience, would be looking at a pay rise of around $140 per week on July 1. Her rate would increase by 27 per cent to $20 per hour, and progressively increase to $23 per hour by July 1, 2021 – a 46 percent increase overall.
If she attained a Level 3 qualification, her rate would increase to $25 per hour in 2021 – a 58.7 percent overall increase. In the short-term, the take-home pay for a minimum wage worker would increase by around $140 a week, or $7,000 a year from July.
The unions involved – E Tu, the Nurses Organisation, the Public Service Association and the Council of Trade Unions – have welcomed the settlement.
And the woman who fronted the case for them, Kristine Bartlett said it would make lives “worthwhile”.
“It will give us dignity and pride and make our lives worthwhile, knowing we’re being paid what we are actually worth. After years of struggling on low wages, hopefully we’re going to have a bit left over to actually enjoy life.” Tens of thousands of care and support workers would now vote on the proposed settlement in coming weeks. E tū Assistant National Secretary, John Ryall said the offer, once ratified would mean a “once in a lifetime pay rise which will end poverty wages for this mainly female workforce and set them on the path to a better life.
“We’re delighted today’s proposed settlement recognises the justice of Kristine’s case and the wonderful work of Kristine and other professional carers.”
Bartlett, an aged care worker from Lower Hutt, argued in court that her employer TerraNova was under-paying staff because of the high percentage of female employees.
A landmark Court of Appeal decision found women in predominantly female workforces could make a claim for pay equity under the Equal Pay Act.
In response, the Government set up a working group to develop principles for dealing with pay equity claims, and introducing legislation late last year that meant employees could file pay equity claims directly with their employer, rather than through the courts.
That was alongside two years of direct negotiations with unions, over a pay deal in the aged care sector.
Last week, education support workers began historic mediation talks with the Ministry of Education after a 10-year fight for pay equity.
In the case of Bartlett, while her pay settlement remains confidential, as a worker on the minimum wage, with no qualification but more than 12 years’ experience, her rate could go from $15.75 to $23.50 on July 1. By year five, her rate would be $27 an hour – a total increase of 71 per cent.
Kristine Bartlett “a hero”
Ahead of the settlement’s announcement, Labour leader Andrew Little said this would be a victory for the perseverance and determination of Bartlett and the unions.
“But make no mistake, the Government has been dragged kicking and screaming to this point, having had lawyers at each appeal stage of the original case opposing lower court decisions on pay equity determinations.”
Green Party women’s spokeswoman Jan Logie said women had been “consciously underpaid” for too long.
“Kristine Bartlett is a hero for her determination to see women paid more – despite Government interventions and stalling – and so are the thousands of other women who have joined her in this fight.”
Logie had a bill in Parliament’s ballot which would see gender pay indexes published, so any pay gaps within businesses and organisations would be transparent.