“Paying corporate rates”: Equal work, unequal pay for small business

Equal work for equal pay is the stated goal of many, but new research indicates its not the case for about one-in-two small businesses.

A survey of 601 payroll managers released on Tuesday by the Australian Payroll Association (APA) found a whopping 58% of small business respondents were paying employees differently for the same work and responsibilities.

Less than a month after the 50th anniversary of Australia’s industrial relations system endorsing the principle of “equal pay for equal work”, the research finds factors such as experience (28%) and how long someone had been at the company (21%) were the biggest contributing factors to small business pay gaps.

The findings come after the Workplace Gender Equality Agency earlier this year revealed a 14.1% discrepancy between full-time average weekly earnings for women and full-time average weekly earnings of men.

APA chief executive Tracy Angwin says the findings demonstrate pay gaps are still prevalent in the Australian workforce as small business owners demonstrate varied needs.

“Small business needs the capability at times, and so they just end up paying corporate rates, so some people are on more money,” Angwin tells SmartCompany.

“You’re also getting younger people who are less experienced and are paid less, but you invest more time in training them.”

Pay discrepancies in the manufacturing, building and construction industries were highest, while 31% of payroll managers in IT and telecommunications reported pay inequality occurred mostly between new and long-standing employees.

It’s not currently illegal to pay workers less for the same work, as long as amounts are above the minimum award conditions, but Angwin says organisations looking to eliminate pay gaps should regularly analyse and monitor their payroll.

It is often assumed small firms don’t have pay gaps because worker numbers are smaller, making the problem easier to manage, but the association’s survey indicates otherwise.