WGEA Review Report

Review of the Workplace Gender Equality Act 2012, December 2021

Executive summary

Overview of the WGEA Review Report

This report proposes ten recommendations to accelerate progress on gender equality in workplaces and streamline reporting for employers to the Workplace Gender Equality Agency (WGEA).

The headline recommendations are:

  • Recommendation 1: make it easier for employers to report to WGEA and improve WGEA’s data collection by enabling WGEA to use data employers have already provided to government, and investing in a way to assist employers to extract other data from their own employer systems using a digital solution. It is proposed that a new Gender Data Steering Group led by senior officials will oversee research and stakeholder consultation to drive this work.
  • Recommendation 2: publish organisation gender pay gaps at an employer level – not just at an industry level as currently happens – to accelerate action to close them.
  • Recommendation 3: bridge the ‘action gap’ with new gender equality standards that set targets by requiring large employers (500 or more employees) to commit to, achieve, and report to WGEA on measurable genuine targets to improve gender equality in their workplaces.
  • Recommendation 4: reduce the regulatory burden for employers by replacing and refining particular ‘pain point’ questions in the WGEA reporting components including removing the ‘reporting levels to CEO’ question.

The ten recommendations outlined in this report will both enhance the Workplace Gender Equality Act 2012 and make it easier for employers to report to WGEA.

Substantially reducing the reporting regulatory burden for employers will free them to take action on the identified gaps and opportunities and help them accelerate progress on gender equality in their workplaces. The recommendations will boost WGEA’s capacity – as an influencer, educator and regulator – to assist employers accelerate gender equality in their workplaces.

Accelerating progress on gender equality in workplaces is good for individuals, employers, families and the broader Australian economy. KPMG research shows that halving the workforce gender participation gap would increase Australia’s GDP by $60 billion in 20 years (KPMG, 2018).

COVID-19’s impact on the community – including employers – is important context for this review. The impact of COVID-19 is both a reason to take more action to accelerate gender equality and to do so in a way that is mindful of impacts on business.

A number of stakeholders called for further consultation on any detailed proposals that might flow from the WGEA Review. This feedback has been taken into account in developing the WGEA Review recommendations. Further consultation, and regulatory impact assessments, are proposed for several key recommendations as outlined below.

WGEA is one part of a broader approach to gender equality

Many stakeholders noted that WGEA’s role working with employers is one part of a broader system to achieve gender equality in Australian workplaces. Stakeholders gave input on a broad range of issues beyond the scope of the Terms of Reference for this statutory review of WGEA’s legislation. This included calls for more affordable and accessible childcare, an increase in shared parenting in families, and skills reforms. Stakeholders noted these issues would have a material impact on further advancing gender equality in Australian workplaces.

The Workplace Gender Equality Act 2012 – ‘Gender equality indicators’ and ‘minimum standards’

The Workplace Gender Equality Act 2012 was established to promote and improve gender equality in the workplace and support employers in advancing workplace gender equality. The Workplace Gender Equality (Matters in relation to Gender Equality Indicators) Instrument 2013 (No 1) requires relevant non-public sector employers (‘relevant employers’) with 100 or more employees to report annually to WGEA against six gender equality indicators (GEIs):

  • GEI 1 – gender composition of the workforce
  • GEI 2 – gender composition of governing bodies of relevant employers
  • GEI 3 – equal remuneration between women and men
  • GEI 4 – availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities
  • GEI 5 – consultation with employees on issues concerning gender equality in the workplace, and
  • GEI 6 – sex-based harassment and discrimination.

Relevant employers with 500 or more employees are also required to comply with ‘minimum standards’ that require employers to have one policy or strategy against one of four gender equality indicators (GEIs 1, 3, 4, or 6).

WGEA was established under the Workplace Gender Equality Act to support employers in meeting their reporting requirements and promoting and improving workplace gender equality. WGEA’s vision is for women and men to be equally represented, valued and rewarded in the workplace. WGEA provides employers with data-backed insights, practical enabling tools and leading edge research to accelerate change to achieve gender equality in Australian workplaces.

The timing of this review coincided with the roll-out of WGEA’s new online reporting platform. WGEA has acknowledged there were many problems with the new WGEA reporting platform, which made the reporting process onerous for employers this year. WGEA notes that reporting should be smoother for employers next year because technical issues have been resolved and some fields in the WGEA questionnaire will be pre-populated with the previous year’s answers.

Workplace gender inequality persists – More needs to be done to address it

A strong theme in the consultation was the persistence of gender inequality and the need to do more to address it. There has been progress on gender equality. But the national gender pay gap is 14.2 per cent. There is a gender pay gap in favour of men across all industries, even female-dominated ones. Women are significantly under-represented in science, technology, engineering and mathematics (STEM) education and careers in Australia. Women are under-represented in higher paid trades. Women experience significantly more sexual harassment in the workplace than men.

There has been some progress on women’s leadership. ASX200 companies have achieved the 30 per cent target set by the 30% Club Australia and the Australian Institute of Company Directors (AICD). However, there are only 18 women CEOs in the ASX300 and of the 23 CEO appointments in 2020-21 only one woman was appointed.

Gender inequality in Australian workplaces is not explained simply by individual choices of women, although choice is a factor. For example, research shows the gender pay gap is influenced by a number of factors, including:

  • discrimination and bias in hiring and pay decisions
  • women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages
  • women’s disproportionate share of unpaid caring and domestic work
  • lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles, and
  • women’s greater time out of the workforce impacting career progression and opportunities. (see WGEA Fact Sheet on Gender Pay Gap at Appendix 6).

WGEA’s role is important to help improve gender equality outcomes in workplaces

The persistence of gender inequality in workplaces underlines the significance of this review of the Workplace Gender Equality Act. WGEA plays an important role supporting employers to identify and address the barriers to gender equality in their own workplaces. Through the consultation process stakeholders said they value WGEA’s role promoting and improving gender equality in Australian workplaces – but it is timely to review WGEA’s legislation to improve standards and streamline reporting.

Stakeholders said WGEA’s dataset on gender equality indicators is world-leading – a ‘national treasure’ – and of great value to many users of it including employers, researchers, government decision-makers, and investors. The dataset is valuable as it is a census of all non-public employers in Australia with 100 or more employees and enables longitudinal analysis.

Many applauded the research work commissioned by WGEA and its contribution to understanding gender equality issues in workplaces and what can be done to improve gender equality. An example of this is the research from BankWest Curtin Economics Centre and WGEA that shows the causal relationship between increasing gender diversity in senior leadership teams and an increase in key company productivity, profitability and performance metrics.

WGEA’s work is also an asset for Australia’s global leadership on gender equality. Sharing and promoting WGEA tools for employers is important in Australia’s work internationally, especially in South East Asia.

However, stakeholders also said progress on gender equality is too slow. They said changes to the Workplace Gender Equality Act are needed to give WGEA enhanced tools to assist employers accelerate the rate of change. Many stakeholders called for strengthening the Act to enhance transparency and require employers to take action on improving gender equality in their workplaces.

More also needs to be done to streamline and improve WGEA’s reporting processes to reduce the regulatory burden on employers, improve the quality of some of the data reported to WGEA, and improve the way WGEA supports employers to advance gender equality in their workplaces.

Retain existing functions of WGEA and scope of the Act

There were calls to extend both the functions and scope of the Workplace Gender Equality Act. However, no changes are proposed to either the function or scope of the Act. WGEA’s functions are already broad enough to enable them to drive progress on gender equality in Australian workplaces.

Many stakeholders supported expansion of WGEA’s scope to include public sector reporting to WGEA. Stakeholders said governments should report to WGEA in the same way as the private sector, not-for-profits and universities are required to report. As governments have made significant announcements about reporting to WGEA, no recommendation is made on this issue. The Australian Government has announced it will start reporting to WGEA from 2022-23. National Cabinet announced on 10 December 2021 in principle agreement from all State and Territory jurisdictions to provide public sector workforce data to WGEA.  

Some stakeholders also called for expansion of the scope of the Act to cover small business. The review concluded that small employers (50-99 employees) should not be covered by the scope of the Workplace Gender Equality Act unless two pre-conditions are met. First, a digital solution to streamline reporting for all relevant employers is developed (see Recommendation 1.1.b). Second, smaller employers have fewer reporting obligations than employers with 100 or more employees.

Two broad themes – Need to accelerate gender equality outcomes and reduce regulatory burden

The recommendations in this report address two broad overarching themes from the consultation and research for this review.

The first broad theme is that the Workplace Gender Equality Act and associated legislative instruments be amended to accelerate progress on gender equality by increasing transparency of employer-level gender pay gaps and requiring employers to take action to meet targets.

There was widespread criticism of WGEA’s legislative framework. Currently, in order to comply with the Act, it simply requires reporting of data across six gender equality indicators by employers with 100 or more employees. For employers with 500 or more employees, the ‘minimum standards’ in the Act require them to have a strategy or policy on only one of four gender equality indicators. In both cases no action on gender equality outcomes is required.

Many said these requirements are insufficient for creating change and need to be strengthened. Many employers, industry groups and employee groups – who appreciate the benefits that gender diversity brings to their workplaces – said the bar for reporting to WGEA, and the associated transparency, needs to be lifted.

The second broad theme is the regulatory burden of WGEA reporting needs to be reduced. Employers have to extract data from multiple payroll and HR systems and do time-consuming manual work joining up, interpreting and checking data from disparate systems to report to WGEA. Several WGEA reporting requirements were identified as particular ‘pain points’. For example, many employers noted that one particular question – ‘reporting levels to CEO’ – was very onerous to report on. Responding to this question requires substantial time-consuming manual work as discussed further below.

The ten recommendations below address these two broad themes.

Make reporting easier for employers and improve collection and use of gender equality data (Recommendation 1)

Recommendation 1.1 is a central recommendation. It recommends that WGEA be able to use data employers have already given government. Research and stakeholder consultations identified that there is no single data source that could wholly replace WGEA data, although Single Touch Payroll data, combined with other data, could replace the need for employers to provide some payroll data to WGEA. However, more work needs to be done on this issue. That is why this report recommends a new Gender Data Steering Group to oversee and drive further research and stakeholder consultation to enable WGEA to be able to use data already provided to government (Recommendation 1.1.a).

It is also recommended that research and stakeholder consultation be done to identify the best way to invest in assisting employers to extract other data from their own employer systems using a digital solution where possible (Recommendation 1.1.b).

Both parts of Recommendation 1.1 address the two major themes from the consultation process and research. Making it easier for employers to report will result in WGEA collecting better data, which in turn will result in better data-backed insights from WGEA to help employers drive gender equality in their workplaces. Also, critically, as noted above substantially reducing the reporting regulatory burden for employers will free employers to take action on the identified gaps and opportunities and help them accelerate progress on gender equality in their workplaces.

The proposed new Gender Data Steering Group will bring strategic senior leadership heft to implementing both parts of Recommendation 1.1. Led by senior officials in the Australian Government (the Deputy Secretary Social Policy in the Department of Prime Minister and Cabinet and the Deputy Australian Statistician), it will oversee implementation of Recommendation 1.1 and improve the impact of the Australian Government’s collection and use of gender data (Recommendation 1.2).

Relevant employers provide input to WGEA on three reporting components – the Reporting Questionnaire, the Workforce Management Statistics, and the Workplace Profile. Developing the proposed digital solution will involve considering the questions in these three WGEA reporting components, taking into account the benefits of the longitudinal dataset WGEA has developed over the last eight years, and considering the stakeholder feedback on the reporting components provided to the WGEA Review.

Publish organisation gender pay gaps to accelerate action to close them (Recommendation 2)

Recommendation 2.1 is that WGEA be able to publish gender pay gaps at the organisation level, and across quartiles of employees, not just industry gender pay gaps as it currently does. The consultation process identified that publishing workforce composition across pay quartiles will contribute to accelerate the narrowing of the gender pay gap. It will help track women and men’s representation at, and progression through, different levels of the organisation. Reporting across quartiles shows the spread of female and male earners across an organisation. It also shows if one gender is over- or under-represented in a particular quartile. This helps employers assess what is happening and take action as needed.

There are different ways to present quartile reporting. Options for how to present quartile reporting and workforce composition by quartiles (gender distribution by head count across quartiles) are at figure 7. The quartile reporting example in figure 7 shows employees in an organisation divided into four equal groups, ranked from lowest to highest pay. The bottom quartile is the lowest earning group of employees, while the upper quartile is the highest earning group. This is one example of how quartile reporting could be represented. The proposed stakeholder consultation on how to implement Recommendation 2.1 will be an opportunity to work out the best way to represent quartile reporting.

Drivers of the gender pay gap are complex. Addressing the contributing factors requires a whole-of-community effort, including focused action by employers. As this is a key change, further stakeholder consultation is critical to ensure implementation of this recommendation achieves its intent: to hold employers accountable to take action, and minimise the unintended consequences.

Issues for stakeholder consideration include the best way to present gender pay gap data at an organisation level. For example, whether it is presented as an overall percentage and/or as an average dollar difference.

Bridge the ‘action gap’ with new gender equality standards (Recommendation 3)

A number of stakeholders said that the current ‘minimum standards’ are out of step with community expectations about what needs to be done to drive gender equality in workplaces. Simply having a strategy or policy on one of four gender equality indicators was roundly criticised as barely meeting the bar of being a ‘standard.’

There were calls for any strengthening of the minimum standards to apply to all relevant employers (not just those with 500 or more employees). However, many businesses and employer peak bodies called for any new standards to apply only to larger employers, noting the regulatory impact of WGEA reporting and current COVID challenges.

Balancing these views, Recommendation 3.1 makes key proposals to bridge the action gap with new gender equality standards. It recommends:

  • adding a new minimum standard to require relevant employers with 500 or more employees to commit to, achieve and report to WGEA on measurable genuine targets to improve gender equality in their workplace against three of the six gender equality indicators
  • strengthening the existing minimum standards to require relevant employers with 500 or more employees to have policies or strategies that cover all six gender equality indicators (not just one policy or strategy for one gender equality indicator as is the requirement in the current minimum standards), and
  • renaming the minimum standards to be ‘gender equality standards.’

The recommendation for a new gender equality standard requiring employers to have targets is a major change. In the consultation process stakeholders asked that there be a co-design process to develop any new standards that might require them to take action against targets. Further consultation is recommended to develop the best way to implement this recommendation. It is also recommended that a regulatory impact assessment of this proposal be done ahead of implementation.

Balancing views from different stakeholders, it is proposed that the new minimum standards apply only to employers with 500 or more employees rather than apply to all relevant employers with 100 or more employees. This tiered approach is in line with the reporting framework in the Minimum Standards Legislative Instrument, which currently applies only to employers with 500 or more employees. It is not proposed that this expanded gender equality standard apply to employers with 100-499 employees. A future review of the Act could consider whether to extend this new reporting requirements to employers with 100-499 employees. Such an extension should only be done if the deregulation benefits of Recommendation 1.1 are realised and after a regulatory impact assessment has been conducted.

Reduce the regulatory burden on employers (Recommendation 4)

In addition to the major proposal in Recommendation 1.1 – to enable WGEA to use data employers already provide to government, and invest in developing a digital solution to make it easier for employers to extract data from their own systems – the report also makes technical recommendations to the existing WGEA reporting requirements (Recommendation 4.1).

Through the consultation process it became clear that several questions accounted for major ‘pain points’ for employers. The proposal to remove the ‘reporting levels to the CEO’ question will remove a major source of this pain. Employers were highly critical of this question saying it requires substantial interpreting and manual checking for accuracy. WGEA advised that this question effectively duplicates the ‘manager questions’ asked by WGEA. WGEA advised that removing the ‘reporting levels to CEO’ question will not diminish the gender data collected by WGEA as they obtain similar information through the ‘manager questions’ employers report on.

There are other technical recommendations to simplify reporting for employers. It is recommended that employers report on casual and part-time actual hours, rather than employers having to report on annualised full-time equivalent figures. It is also recommended that the ‘proportion’ of the workforce questions are replaced with a simpler requirement to report on ‘numbers’ of the workforce with access to parental leave.

Support Respect@Work implementation to prevent and address sexual harassment (Recommendation 5)

The Sex Discrimination Commissioner’s duo of landmark reports in the last two years – Respect@Work and Set the Standard – underline that preventing and addressing sexual harassment is vital for accelerating progress on gender equality in Australian workplaces.

Employers already report to WGEA on sex-based harassment and discrimination. However, sex-based harassment is the only gender equality indicator that is specified in Workplace Gender Equality (Matters in relation to Gender Equality Indicators) Instrument 2013 (No. 1) but not also in the Workplace Gender Equality Act. In recognition that sex-based harassment and discrimination is a core gender equality standard, Recommendation 5.1 proposes legislative change to bring the Act and Instrument in line and make sex-based harassment and discrimination a gender equality indicator under the Act.

As the Respect@Work Council is already overseeing work underway by the Attorney-General’s Department (AGD) and WGEA – as part of implementing Roadmap for Respect – no change is recommended to the current gender equality indicator reporting requirements on sexual harassment. Roadmap for Respect is the Australian Government’s response to Respect@Work. Proposals for reforms are likely to flow from WGEA’s work implementing recommendation 42 of the Respect@Work report. Those proposals will be enhanced with the benefit of the submissions made to the WGEA Review.

Additional diversity data (Recommendation 6)

Recommendation 6.1 proposes WGEA conduct research on the best way to collect additional diversity data on Aboriginal and Torres Strait Islander background, cultural and linguistic diversity, and disability. This research is needed as many raised that collecting this data requires a sensitive approach. Employees can be reticent about providing this diversity data for fear of negative consequences at work. Privacy, trust and safety are key issues to explore in this research, together with input from employers about what kind of diversity data they collect.

Refine the gender equality indicators (Recommendation 7)

The six gender equality indicators in the Workplace Gender Equality Act remain relevant. Capturing data across the six gender equality indicators continues to give insights into addressing the major challenges to gender equality in the workplace.

In assessing the need to refine the gender equality indicators, the WGEA Review considered WGEA’s experience with voluntary reporting. Given the high rates of voluntary reporting on certain issues, and the value of data on those issues, it is proposed that it be mandatory to report on age of employees, their primary workplace, and whether superannuation is paid on paid and unpaid parental leave (Recommendation 7.1.a, b and c).

Many additional GEIs were proposed in the consultation process. However, it is recommended that only four targeted mandatory reporting questions be added at this stage. This strikes the right balance between stakeholders who asked the review to be mindful of the regulatory impact of introducing additional reporting requirements and those who sought to add more GEIs to accelerate the pace of change.

It is also proposed that employers report on CEO remuneration to WGEA (Recommendation 7.1.d). Exclusion of this data means gender pay gap data is incomplete. Individual remuneration would not be public but would be aggregated to calculate gender pay gaps and used for other remuneration analysis and insights.

Recommendation 7.2 proposes alignment with the Australian Bureau of Statistics (ABS) 2020 Standard for Sex, Gender, Variations of Sex Characteristics and Sexual Orientation Variables so WGEA can collect data on non-binary people.

This report also recommends further work be done: to improve the WGEA questions on ‘occupations and jobs’, on how to include partners in partnership structures more comprehensively in WGEA’s dataset than they are currently, and to consider making it mandatory for employers to report on data for individual entities in corporate structures, not at the group level as happens currently (Recommendation 7.3).

Strengthen compliance and enforcement (Recommendation 8)

There was widespread feedback that the current compliance and enforcement mechanisms are inadequate and need to be improved. Recommendation 8.1 is that employers must comply with WGEA reporting requirements for Commonwealth grants eligibility and Commonwealth procurement participation. To improve these compliance tools it is recommended that the practical application of the Workplace Gender Equality Procurement Principles be reviewed.

A number of stakeholders called for stronger enforcement measures. However, financial penalties, and compliance or improvement notices are not recommended. This is in line with WGEA’s regulatory approach which seeks to help employers meet their obligations to achieve progress on gender equality in Australian workplaces. If the Government adopts the recommendations in the report, WGEA should assist employers meet the ambitious proposed new standards in the first instance rather than enforce new punitive compliance mechanisms.

Any future review of the Workplace Gender Equality Act (see Recommendation 10) should assess whether stronger enforcement powers are needed. That will be an opportunity to consider additional enforcement powers if there is a reduction in the current high compliance rate.

Set WGEA up for future success to support employers to drive gender equality in Australian workplaces (Recommendation 9)

To fully realise the potential of the proposed reforms for employers and their workplaces additional investment in WGEA will need to be considered by the Australian Government (Recommendation 9.1).

Among other proposals, Recommendation 9 proposes that WGEA review its Employer of Choice Gender Equality (EOCGE) citation to improve its effectiveness. It also proposes that WGEA continue to improve the way it supports employers to progress gender equality in workplaces. This includes, for example, developing tailored ‘off the shelf’ policies for use by small and medium enterprises and publicising positive progress by employers. The measure of success for this work is that employers use the full range of WGEA’s tools and supports and find them helpful to improve gender equality outcomes in their workplaces.

Review the Workplace Gender Equality Act in five years from the date any legislative changes commence (Recommendation 10)

A staged approach to implementation has been suggested in some recommendations. The intent is to support employers to adjust to any new standards flowing from the report. A review five years after the commencement of any legislative amendments flowing from this WGEA Review will assess the effectiveness of reforms and provide an opportunity to make any changes as and if needed (Recommendation 10).

WGEA Review consultation process

The Australian Government announced this targeted review of the Workplace Gender Equality Act 2012 in the Women’s Budget Statement 2021-22. On 20 October 2021, the Minister for Women announced the start of the review. The Terms of Reference for the review are at Appendix 1.

On 20 October 2021, the WGEA Review Team in the Department of Prime Minister and Cabinet released a Consultation Paper seeking input on the ten questions at Appendix 2.

The review’s recommendations are based on research undertaken in October 2021 and consultation with stakeholders throughout November and December 2021. Employers, industry groups, unions, advocacy groups, government officials, and academics made practical and ambitious proposals on two broad themes – accelerating progress on gender equality in Australian workplaces, and reducing the regulatory burden on employers.

Eight virtual roundtables were held with stakeholders in November 2021 and 155 written submissions were received. The consulting firm ThinkPlace facilitated the eight roundtables, provided analysis on data issues, and prepared the separate WGEA Review Consultation Report on the consultation process. Further information about the consultation methodology is at Appendix 3 and a summary of themes from the consultation process is at Appendix 4.

Two Expert Advisers assisted the review, Pip Marlow, CEO Salesforce, and Kerri Hartland, Principal Advisor, Proximity (and former secretary for the department that had portfolio responsibility for WGEA). The Expert Advisers provided strategic guidance drawing on their fields of expertise. They provided different perspectives on engaging with WGEA as a large and smaller employer respectively.

The WGEA Review Team is grateful to everyone who assisted the review.