Addressing the impacts of pay disparities in the funded health sector
In brief
Background The nursing workforce in New Zealand have opportunities to work in
Current pay relativities favour Te
different practice settings across the motu. Pay differentials between workers in different parts of the sector mean some services experience
and hospital work over most
recruitment and retention pressures linked to remuneration. As a result, service supply issues are being seen in parts of the community-based workforce with increasing employee vacancy rates and providers unable to deliver full services and needing to make very difficult decisions (eg, closing beds and lowering staff time available to patients). This reduction in services tends to increase the demand on
Whatu Ora-employed workers community settings. Cabinet has approved additional funding: • $40 million in 2022/23 •
Up to $200 million from 2023/4
Priority is given to service settings with the greatest pay disparities and equity challenges.
hospital and specialist services. What has been approved Cabinet has approved additional funding to enable early action to bolster the health funded sector while health agencies undertake work to address these issues for the long-term. This includes $40 million to be delivered by 1 April 2023 to priority service settings with the greatest pay disparities and equity challenges, including Kaupapa Māori and Pacific providers, aged residential care and home and community support services, and Hospice providers. Further funding of up to $200 million will be available from 2023/24 to address disparity within mental health, other residential care and whaikaha disability care settings. How will it be implemented Pay rates are expected to be lifted through service contracts with higher service prices linked to increasing pay rates, to promote better alignment across roles and settings. Contracts with private and NGO providers have requirements around any changes – proper process needs to be followed, even where providers already want to pay higher wages. Changing contracts will promote but not guarantee parity with Te Whatu Ora pay rates. Roles and provider costs vary, and providers need to retain flexibility to best use staff skills for service continuity and health
Initial priority funding ($40 million) to address pay disparities for nursing and comparable kaiawhina workforces in: • •
Kaupapa Māori providers Pasifika providers
• •
Aged residential care Home and community support
•
services Hospice
Further funding (up to $200 million) to address pay disparities for nursing and comparable kaiawhina workforces within: • •
Mental health and additions Other residential care
•
Whaikaha disability care settings
Proposed timeline •
April 2023 – Initial funding delivered by 1 April 2023
•
July 2023 – further funding delivered by end of July 2023
•
Over 2023/24 final funding delivered
outcomes. What it will achieve It will better align pay rates for nursing and kaiawhina roles (not covered by a pay equity claim/settlement) with comparable Te Whatu Oraemployed workforces. It will signal to all nurses and other health workers that their work is valued. What it won’t achieve It will not guarantee the same pay and conditions for all. It will not fully address the service supply issues seen with current shortage of nurses, nor stop nurses emigrating for international career opportunities.
Acknowledgements: • Pay disparity is not uniform •
across the funded sector Other healthcare roles in the funded sector are also subject to pay differentials.
Version 3 – 28/11/2022
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