55,000 female staff will receive a pay rise of between 15 and 50% in the country’s first legal settlement that determined some jobs pay less because they are mostly done by women.
Wages will increase to between $19 to $27 per hour over five years, depending on the type of work, experience and qualifications.
Currently most workers are on the minimum wage of $15.75 an hour.
So for a full-time worker moving from the minimum wage to $19 an hour, this is a 21% pay rise – or around an extra $100 a week, which is over $5,000 a year.
The decision follows 20 months of negotiations between aged care operators, unions and the Government after a high-profile court case for equal pay led by aged care worker Kristine Bartlett against Terranova Homes in 2012.
The New Zealand Aged Care Association (NZACA), which represents over 90% of the sector’s 38,000 beds, says the decision brings aged care workers up to parity with their colleagues in the public hospital system.
“Today’s settlement creates the right pay and conditions for caregivers and is a game changer in a sector that has traditionally struggled to attract New Zealanders into these roles,” Chief Executive Simon Wallace says.
The settlement will initially be funded by the Government through an increase of $1.856B to Vote Health and $192M to ACC, though they acknowledge ACC levies may “possibly increase” over the next decade to support this.
“There may also be an increase in costs for people in aged residential care facilities, whose assets keep them above the subsidy threshold. This will be determined through the annual Aged Residential Care contract negotiations,” Health Minister Jonathan Coleman said.