The Government has announced $200 million a year will go towards boosting the pay of frontline community health workers to ensure there is parity across the sector.
The move has been welcomed by the country’s largest nurses union as “long overdue”, including prioritising raising wages of workers in Māori and Pacific organisations where the biggest gaps in pay lie.
“I’m pleased to announce that Cabinet has agreed to ongoing funding of $200 million a year so that thousands of workers in places such as aged-care facilities, hospices and Māori and Pacific health-care organisations can be paid more,” Health Minister Andrew Little said.
Pay parity had been a historic issue in the health sector with nurses who worked for then-district health boards earning more than counterparts in general practice, aged residential care and other community providers, despite performing the same role.
The funding would affect an estimated 20,000 people who will get a pay rise, and the organisations employing them, which have struggled to keep staff when they can’t afford to pay as much as Te Whatu Ora Health New Zealand.
Little said the pay difference between nurses and healthcare workers in public hospitals, and many of those in what is called the funded sector (private and non-Government organisations that get Government funding to provide healthcare), was the result of the Government’s earlier actions to lift the pay of a traditionally female workforce.
This involved a pay equity deal where 10,000 public hospital administration and clerical workers got pay rises of as much as 40 per cent.
The Government is also negotiating pay-equity agreements with midwives, allied health workers and homecare and support workers, and has boosted the pay of nurses working for Te Whatu Ora by an average 20 per cent, putting aside $540m a year for a pay equity settlement for them.
“It’s the right thing to do, and now it’s time to start addressing the pay rates of those health workers who don’t work for Te Whatu Ora,” Little said.
The funding would get to the private and non-Government employers through changes to their contracts with Te Whatu Ora and with Te Aka Whai Ora – the Māori Health Authority.
The Government would require the employers to use the money to fix the pay difference between them and public hospitals. For the remainder of this financial year $40m would be set aside and $200m a year after that.
Aged-care facilities, hospices, homecare support and Māori and Pacific healthcare organisations will be first, because there is clear evidence that that is where the biggest pay gap is, Little said.
Contract changes were expected in those places from the first part of next year, followed by mental health and addiction facilities, organisations caring for the disabled and other types of residential care, and then other Government-funded health services.
The package will not mean significant change immediately for those working in GP practices, however.
Little said data provided by both the Nurses Organisation and the GPs’ organisation GenPro for that sector did not show any “real evidence of pay difference at this point”.
“The funding is ongoing, though, and that decision could change if evidence of disparity emerges in the future.”
Aged Care Association and the New Zealand Nurses Organisation (NZNO) were involved in putting the package together.
NZNO chief executive Paul Goulter said they “welcome” the news.
“The minister has made it a priority and we are pleased to see it come through. We await details about how it will play out, we say it is the start of a journey and there is a lot of detail to be sorted out,” Goulter said.
That detail included how the funding would be transmitted directly into wages, with nurses still needing to negotiate with their employers.
“But we welcome it, in a directional sense. It is long overdue.”
They also strongly supported prioritising the pay parity gap for Māori and iwi providers.
“That is where the biggest pay parity gap is so we want to see that urgently closed.”
It comes amid a long-fought battle between the Public Service Association and NZNO, and Health New Zealand, over the related issue of pay equity that was heading to the Employment Court, while the health sector struggles with a crippling nurse shortage that amounts to roughly 5000 vacancies.
Pay equity is about ensuring men and women get the same pay for doing jobs that are different but of equal value and with similar levels of skill and responsibility.
The unions were engaged in a battle over backpay they felt was promised to their members during a landmark agreement between unions and district health boards (now replaced by Health New Zealand) to establish pay equity.
In May, the NZNO confirmed its members had voted to refer the DHB Nursing Pay Equity settlement - worth about $520 million per annum to the health payroll - to the Employment Relations Authority (ERA).
The matter had since been transferred from the ERA to the Employment Court.