New Zealand is trailblazing uncharted territory following the Government's move to introduce laws to ensure women are paid fairly, says an advocate for women's business development.

Co.OfWomen chief executive Tara Lorigan said it was pleasing to see action being taken to level out the income field.

"This is very good news. Anything that's going to address a potential deficit between gender when it comes to pay is very welcome," Lorigan said.

"This is new territory, not just for New Zealand but the world, and undoubtedly there will be challenges - it's not a linear thing, but what's really exciting and what I'm personally encourage by, is that this government is of action."

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Enforcing the change would not be straight forward, but that didn't mean it was a reason not to proceed, Lorigan said.

"You can get very distracted by the potential problems, but if we agree that gender equity in this area is important - and I think most people do, then what we have to work out is how to achieve that," she said.

"One of the things that characterises Kiwis is we give it a go."

However, while the commitment to gender pay equity is music to many people's ears, one business lobby is worried the move won't succeed.

"My biggest fear is it is going to create industrial disharmony," said Employers and Manufacturers Association chief executive Kim Campbell.

"We've got to hope that we don't end up with something that is a bear ... that's so complicated and expensive that everybody ends up arguing for the next 20 years."

The Government today announced it would reconvene the pay equity working group and made a commitment to pass legislation at the middle of this year to address the pay levels of women working in women-dominated jobs.

Workplace Relations Minister and Safety Iain Lees-Galloway and Minister for Women Julie Anne Genter said the Traci Houpapa-led working group would meet tomorrow and make recommendations to ministers by the end of February.

Kristine Bartlett, the rest home worker who won the pay equity victory. Photo / Mark Mitchell
Kristine Bartlett, the rest home worker who won the pay equity victory. Photo / Mark Mitchell

The National Government introduced a pay equity bill following legal action taken by the E Tu union on behalf of aged care worker Kristine Bartlett, but it was criticised for making any future pay equity deals harder to achieve.

Among other things, it stipulated anyone attempting a pay equity claim would first have to look at their own profession and industry before making comparisons across industries.

That bill was dumped by the Labour Government in November.

Campbell said he was hoping for a simple formula but was wary it could end up "something like the Holidays Act which is so full of ambiguity".

The gender pay gap is smaller among young people, according to data from last year, based on median hourly earnings, from Statistics New Zealand.

Between the ages of 15 and 19 there is no gender pay gap. Between the ages of 20 and 24 there is a pay gap of 0.9 per cent but this soars to 19.9 per cent for those aged between 50 and 54.

This is new territory, not just for New Zealand but the world, and undoubtedly there will be challenges - it's not a linear thing.

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BusinessNZ welcomed news of a convened pay equity working group.

Chief executive Kirk Hope said it would be important for the legislation to enable legitimate pay equity claims.

EMA and BusinessNZ, along with the New Zealand Council of Trade Unions is part of the government's working group.

Issues for resolution include criteria for accepting pay equity claims and selecting male comparators when adjudicating claims, it said.

Kim Campbell, chief executive, Employers and Manufacturers Association. Photo / File
Kim Campbell, chief executive, Employers and Manufacturers Association. Photo / File

"The [current] law requires, and has for a very long time, that when a man and a women do the same job they get paid the same amount, that's equal pay and the law, and it always has been," Campbell said.

"Where it's a little bit more difficult is where you have industries dominated by women, say nurses, and the question is; is it fair that in total they earn less than men who, say, work as firemen.

"How do you compare those kinds of occupations and come up with a pay that's equivalent?," Campbell said. "Nobody in the world has been able to do that."

Tech company Xero also welcomed the government's steps to close the gender pay gap, said New Zealand country manager Craig Hudson.

"We understand the importance of pay equity in that it aligns with what we believe in as a business," Hudson said. "It's better for our people, and will lead to better business outcomes."

The joint working group is expected to make recommendations and discuss the methodology for the new legislation next month.

- additional reporting by BusinessDesk.