Extension of pay equity settlement

What is a pay equity settlement?

A pay equity settlement is an agreement between an employer (or group of employers) and a union or claimant. The settlement is what happens at the end of a pay equity claim process, when there has been agreement to what has been negotiated between the parties to a claim. The pay equity process will have looked at whether the workers have been undervalued and underpaid because they are predominantly women. If undervaluation is found, a settlement will be agreed to correct it.

What is the pay equity settlement that has been reached for social workers?

A pay equity claim has been settled covering 492 workers in 5 community-based social service organisations. The people who are receiving the benefits of the settlement are social workers or those working in social work roles in 5 organisations that the claim was lodged against. The organisations covered by the settlement are Barnardos, Christchurch Methodist Mission, Ngāpuhi Iwi Social Services, Stand Tū Māia, and Wellington Sexual Abuse HELP. The settlement removes any sex-based undervaluation in pay, terms and conditions of employment for those doing social work in these organisations. The settlement sets up a new step-based pay system for all of these workers. See Pay Spine document(PDF, 620 KB)

The settlement also makes sure workers can, where appropriate, have the costs of their professional support paid by their employer, including:

• professional development
• cultural supervision
• supervision
• professional membership fees.

You can find more detailed information about this settlement on the Social Service Providers Aotearoa websitehere.

What is the extension?

The Equal Pay Act 1972 asks workers in every organisation in a sector to raise a separate pay equity claim and to go through a pay equity process. This means that it could take years for everyone working in the same sector to get pay equity, because there are hundreds of community and iwi organisations funded by the Government.  To fix this, a process was set up by the government where, in certain circumstances, a pay equity settlement could be extended out across all community and iwi organisations in the sector, so that all workers doing the same work could be paid at the pay equity rate. Extending a pay equity settlement is not something that happens automatically. Government (through a Cabinet decision) is the decision-maker about whether a specific pay equity settlement will be extended or not. Cabinet has now agreed an extension for the social worker settlement, which means the settlement reached with the 5 organisations can be extended to workers in social work roles in other community and iwi social service organisations.

What are the categories of work covered by the extension?

The pay equity process looks closely at the work done by workers in a claim. It’s important to know that pay equity is decided after looking at the work done, rather than specific role titles or job descriptions. Because of this, some workers who do not have “social worker” in their job title may be covered by the extension of this pay equity settlement, because of the kind of work they do.

There are 4 areas (categories) of work covered by the extension. These are:

• Registered or registerable social workers
• Registered professionals undertaking social work
• Professionals undertaking work that is the same or substantially similar to social work
• Registered social workers leading social work practice

This document provides detailed information on the categories of work(PDF, 265 KB) 

Who will be covered by the extension?

Community and iwi organisations are covered by the extension if they:

• receive government funding for service delivery, and
• employ social workers or those in social work roles to deliver these services.

To make sure the Government provides the right amount of funding to extend the benefits of the settlement to these organisations, Te Kawa Mataaho needs to collect information from each and every one of these community and iwi organisations, including information on the contracts and number of workers the settlement relates to. If an organisation does not provide this information, they cannot receive the funding to provide the benefits of the settlement to their workers.

What is not covered by the extension?

Any social workers or those in social work roles who are:

• funded through philanthropic funding sources (i.e., lotteries, etc.)
• privately funded.

Roles which fall outside of the four categories of work

Social workers or those in social work roles covered by another active pay equity claim or those who have already received a pay equity settlement.

When will the extension be effective from?

It is important that the extension of the settlement reaches all those workers who meet the criteria. To support this happening, a process now needs to be undertaken, to gather data and information to inform the practical implementation of the extension. The extension will happen when the required information/data is collected, and the right amount of funding is provided by the Government for all the community and iwi organisations. Everyone is working as quickly as possible to complete this work. Te Kawa Mataaho is leading this process.

How can I support the process to happen faster?

You can help by sharing information about the extension with any workers, community and iwi organisations, and funders you have connections with. We need to make sure we reach everyone and get information back from organisations within a set timeframe to help get everything done. 

Will community/iwi workers be back paid money in the extension?

There will be no backpay in the extension. The extension is to correct for sex-based undervaluation going forward.  

What will the extension mean for me as a community/iwi organisation?

If you receive Government funding to deliver services and you employ social workers or those in social work roles to deliver these services, you will be eligible to be part of the extension process. Essentially this means that the benefits of the pay equity settlement that has been reached with the 5 employers in the claim will be extended to your organisation.

How will the extension happen, practically speaking? 

The funding needed to pay the corrected pay rates for your workers covered by the extension will be provided to your organisation via a variation to your contract/s with government funding agencies. This additional funding must then be passed on in full to those workers, so they receive the new pay equity rate of pay and the funding for their professional support.

What do community and iwi organisations need to do now?

Te Kawa Mataaho will be requesting information from every Community and iwi organisation so that it can calculate the total cost of the extension and make sure the right amount of funding is requested from Government. It is critical that all community and iwi organisations provide the information and data requested by Te Kawa Mataaho. 

Community and iwi organisations can start preparing for the data collection process by:

• Getting together information about the contracts you currently have with government agencies where the delivery of the service requires social work.
• Look closely at the categories of work(PDF, 265 KB) and consider how you will put together when asked a list of how many workers and how many fulltime equivalent (FTE) roles you employ in each category (including vacancies)
• Think about how these workers are connected to the funding you receive through contracts with government funders. We understand that sometimes, different parts of one FTE may be funded through more than one contract. We realise this can be complicated, so we recommend that you start to do this now.

When will Te Kawa Mataaho request information from my organisation?

A detailed request for the information required from community and iwi organisations will be sent out in early 2023. This will include information on when and how to provide the information.

To make sure you receive this request and other communication from Te Kawa Mataaho, please send the name of your organisation and the email address and phone number for a contact person, to payequityextension@publicservice.govt.nz

How will the confidentiality and privacy of the information be managed?

Te Kawa Mataaho will be collecting information from community and iwi organisations, including information about the contracts and workers within the organisation that are covered by the extension. We are collecting this information so that the organisations can be provided with the right amount of funding to provide the benefits of the settlement to the workers that are covered by it.

Besides our staff, we will share this information with the government agencies that fund each organisation for the services covered by the extension. The funding agencies will be asked to review the information and match it with their own data to make sure nothing is missed. Providing information is optional. However if a community or iwi organisation chooses not to provide the required information we will be unable to arrange for the appropriate funding to be provided.

Organisations and their workers have the right to ask for a copy of any personal information we hold about them, and to ask for it to be corrected if they think it is wrong. If anyone would like to ask for a copy of their information, or to have it corrected, please contact us at payequityextension@publicservice.govt.nz

The information and data collected by Te Kawa Mataaho will only be used for the purposes of the process to extend the settlement. It will be stored securely and not shared with other community and iwi organisations, or other third parties other than those directly involved in the process.

Will the extension mean that community and iwi organisations can renegotiate their contract for service delivery?

The extension is not an opportunity for community and iwi organisations to renegotiate their full contracts. Te Kawa Mataaho is collecting information about current arrangements, the number of current employees covered by the extension, and the amount of funding needed to pay the pay equity rates to these workers. This process is not able to address any other funding issues that organisations may have. These matters should be taken up through the normal processes with funders.

Will the on-costs of the increased pay rates be considered?

Yes, costs such as increased Kiwisaver contributions and leave entitlements will be included in the total funding organisations receive to implement the extension.

What do funders need to do now?

To make the extension process work as smoothly as possible, it is important that all relevant government agency funders are aligned with and actively engaging in the extension process.

All government agency funders that have a connection point with social work will have a key role to play in helping Te Kawa Mataaho reach all providers that receive government funding. Funders have close relationships with those organisations in the sector that they fund, and we will be relying on these relationships to reach all community and iwi organisations covered by the extension and make sure they have a chance to participate and ultimately for their workers to benefit from the extension.

Once Te Kawa Mataaho collects information from all the providers, funders will also have a critical role in cross checking this information and helping us understand the funding arrangement in more detail. Te Kawa Mataaho will keep in touch with funders as this work progresses.  

How will funders vary their contracts?

Each funder will be responsible for varying their own contracts with the community and iwi organisations covered by the extension, in order to reflect the corrected pay rates for people in social work roles. Te Kawa Mataaho will look to provide some standardised contract variation wording that funders will be able to adapt for their context. We will be staying in close contact with funders to make sure this is as manageable as possible.

How can workers be sure their organisation will pass the increased funding on to them?

The funding for community and iwi organisations will be provided through the extension on the condition that they put in place the new pay system and shift their employees to the appropriate step using the guidance provided. If a worker is on an individual employment agreement (IEA) they will get a new ‘letter of offer’ with the details of the new pay system and benefits from the settlement to attach to your employment agreement. If a worker is on a collective agreement, the agreement will be updated and ratified through their union’s normal process.

How does a worker know if their organisation has taken part in the extension process?

In the first instance, workers should talk to their manager and ask if the organisation is participating in the process. If they haven’t heard about the extension, workers can pass on this fact sheet and ask that their employer gets involved in the extension process.

When will workers receive a pay correction?

There is a significant amount of work to get done to make sure the right money gets to the right people. First, we have to get information on all the organisations, funding contracts and then people covered by the extension. As you can imagine, with several thousand workers covered, this is not a simple task. Once this data has been collected, we need to work with funders and community/iwi organisations to make the extension happen through changes to contracts and employment agreements. We are committed to working as quickly as possible and will keep you up to date on progress.