$2b pay equity settlement transformed workers' lives - but has not been without problems

Equal Opportunities Commissioner Saunoamaali'i Karanina Sumeo said she was concerned about reports of bullying of care workers after the pay equity settlement. Photo / Getty Images

Workers in women-dominated industries say their hours have been cut or they have been bullied into working longer or harder after the historic pay equity settlement.

While all workers and many managers in aged residential care, home support, and disability services were thrilled with pay rises of between $3 and $7 an hour, they said the settlement had some unintended consequences.

In the worst cases, people in Government-funded service industries said they had been bullied into doing jobs they were not qualified for or had ended up financially worse off because their bosses had not been funded enough to maintain their regular hours.

The pros and cons of the $500 million-a-year settlement for traditionally low-paid, female industries were revealed in new research by the Auckland University of Technology's New Zealand Work Research Institute, published today.

Brought into force in July 2017, the settlement meant workers on the minimum wage of $15.75 an hour had their pay boosted to at least $19 an hour. More experienced workers would be earning $27 an hour by 2021.

"One year in, it was a bit of a mixed bag," said AUT researcher Katherine Ravenswood, from the Department of Management.

"The idea of addressing low wages and pay equity was great in everyone's view, but the practicality of how it was funded and implemented took some of the shine off."

On the positive side, care workers said their quality of life had been transformed and they felt their role was being valued in society for the first time.

"I went to the dentist after not having been … for about six years," one woman in the aged care industry told the researchers. "My husband had just retired and I was able to buy him for his 65th birthday a pair of spectacles because we haven't had glasses for about 15 years."

Managers backed the pay rises, saying their staff were finally getting what they worth. But they also said they were working within a limited budget, and that the pay hikes had created new cost pressures.

This was most pronounced in the home and community care sector, which was recently reformed to require guaranteed hours and funded travel time.

When the settlement pay rises were added on top of those entitlements, many workers had their hours drastically cut because their bosses could not afford to pay them. Some staff were now struggling to make ends meet and had taken on second jobs.

Equal Opportunities Commissioner Saunoamaali'i Karanina Sumeo said one of most concerning findings was the effect the cost pressures had on staff.

"What I didn't expect to see was an indication of some bullying behaviour towards care workers who were expected to do more clinical work that they weren't expected to do before."

Other female-dominated industries like nursing are now seeking similar pay equity settlements.

Sumeo said she would be asking the Government to come up with agreed standards of care for these sectors, such as minimum staff ratios.

"The study indicates that compromises are being made on staff ratios as a result of the settlement," she said.

Pay equity settlement

• 55,000 workers in the Govt-funded service sectors, which are dominated by women

• Lifted pay by between $3 and $7 an hour by 2021

• Came into force July 2017