Gender Equality Targets Introduced for Large Australian Businesses
The Commonwealth Parliament has recently passed amendments to the Workplace Gender Equality Act 2012 (Cth) (the "Act") impacting businesses with more than 500 employees (including casual employees) in Australia ("Designated Relevant Employers").
Entities that are part of a corporate group must each employ 500 or more employees in Australia to be subject to the new requirements. A parent company or subsidiary will not be a Designated Relevant Employer if it employs only 500 or more employees in Australia when combined with its related entities. An overseas parent company will be subject to the obligations where it employs 500 or more employees in Australia, regardless of where it is headquartered.
Pursuant to the Act, Designated Relevant Employers must set three gender equality targets from a menu of numeric and action-orientated targets starting in 2026 and then either achieve or demonstrate improvement toward meeting such targets every three years. The 19 legislated options are stated to be evidence-informed targets reflecting common challenges faced by employers as reported in the annual gender equality reporting data.
Designated Relevant Employers are not permitted to select targets that commit them to taking an action that they have already taken, such as implementing an employer-funded parental leave scheme if there is already such a scheme in place.
A Designated Relevant Employer will fail to comply with the Act if it does not meet its selected targets for the period or fails to demonstrate improvement against the targets without a reasonable excuse, which is not defined. The business's achievement or progress toward its targets will be made publicly available online.
Under current Australian Government policy, evidence of compliance with the Act can be requested when tendering for Australian Government contracts worth more than a certain procurement threshold. Failure to comply can therefore limit a business's ability to win Australian Government contracts.
At the end of each three-year reporting period, covered businesses will be required to select new targets for the next three-year cycle.
We recommend that businesses with more than 500 employees in Australia undertake a comprehensive gender pay gap analysis prior to selecting targets in order to identify the most effective but achievable gender equality actions.
