Hitting the Mark: WGEA's Target-Setting Experiment

The Workplace Gender Equality Act has always been a transparency regime. Report your data. Publish it. Let the market respond. That model, in place since 2012, rested on a straightforward proposition: sunlight is the best disinfectant.^[1]

And it has worked, to a point. Since the Act's commencement, Australia's national gender pay gap has fallen from a high of 18.7 per cent to a low of 11.5 per cent. Women's workforce participation has reached an all-time high of 63.5 per cent. The proportion of employers offering paid parental leave has increased from 48 per cent in 2015–16 to 68 per cent in 2023–24.^[2] These are meaningful shifts, driven in part by the reporting and accountability framework that the Act established. Schemes to promote social and economic improvement can be turbo-charged with regulatory support, and the WGEA framework has demonstrated its value.

The question is whether the next iteration of that framework will sustain and accelerate that progress, or whether its architecture introduces distracting complexity.

The Workplace Gender Equality Amendment (Setting Gender Equality Targets) Act 2025, which commenced on 4 April 2025, introduced a new requirement for employers with 500 or more employees to select, commit to, and either meet or demonstrate improvement against three gender equality targets over a three-year cycle.^[3] That covers roughly 2,000 organisations and around 4 million workers.^[4] The first private sector reporting window is now open. Target selections must be lodged between 1 April and 31 May 2026, with Commonwealth public sector employers to follow from 1 September 2026.^[4]

Transparency, with Built-in Economic Consequences

The 2012 Act was designed to promote gender equality with the expectation that visibility would drive accountability.^[1] The 2023 amendments, which enabled the publication of individual employer gender pay gaps, pushed that transparency further,^[5] adding pressure to create a competitive 'race to the top.'^[6] The targets scheme adds built-in economic consequences to this market-driven incentive.

Employers must select three targets from a prescribed menu of 19 options spanning the six gender equality indicators.^[7] At least one must be numeric, requiring a specific percentage-point improvement against a baseline drawn from the employer's 2025 Gender Equality Report.^[8] Targets are locked in for the full three-year cycle and cannot be altered mid-cycle.^[4]

At the end of the period, the Agency will assess whether each employer has met its targets or demonstrated improvement by comparing its final-year (2028) data against the 2025 baseline. Failure without reasonable excuse means non-compliance with the Act.^[4]

Non-compliance carries two distinct consequences. The Agency may refuse to issue a certificate of compliance, a precondition for eligibility to tender for Commonwealth government contracts.^[9] That is the financial consequence. The Agency may also publicly name the employer in a report tabled in Parliament.^[10] That is the reputational consequence.

The architecture is deliberate. Legislative force compels the setting of targets. A legislative instrument prescribes the menu. Government procurement policy delivers the financial consequence. But the procurement link does not sit within the Act itself. It is contained in the Workplace Gender Equality Procurement Principles, a 'connected policy' under the Commonwealth Procurement Rules administered by the Department of Finance.^[11] The target scheme's primary incentive is anchored to bureaucratic policy settings, not legislation. Any future change to government procurement priorities could weaken or remove the economic consequence without touching the Act.

The cross-portfolio architecture is not accidental. Senator the Hon Katy Gallagher held the portfolios of Minister for Finance and Minister for Women throughout the design and passage of the scheme. The Department of Finance administers the Commonwealth Procurement Rules and approves procurement-connected policies. The procurement enforcement lever was explicitly foreshadowed in the government's Working for Women strategy as an election commitment: employers with 500 or more employees would need to commit to gender equality targets 'in order to win government work.'^[20] Consolidated ministerial oversight across both portfolios created the conditions for this kind of regulatory innovation, using a tool from one portfolio to enforce an objective in another.

The Explanatory Memorandum to the Setting Gender Equality Targets Bill 2024 described the scheme as a 'world-first.'^[12] This may apply to enforcement via procurement policy as much as it does to performance targeting.

The Targets Menu

The Workplace Gender Equality (Gender Equality Targets) Instrument 2025 prescribes 9 numeric and 10 action-based targets across the Act's six gender equality indicators.^[7]

Table 1: Gender Equality Targets Menu

Source: Workplace Gender Equality (Gender Equality Targets) Instrument 2025; WGEA Targets Menu Guide (February 2026).

Employers cannot select targets they have already met. Action targets must constitute new entitlements or processes not already in place.^[8] Numeric targets require a nominated absolute (not relative) percentage-point improvement — for example, a 2 percentage-point commitment from 13 per cent to 15 per cent. Behind the surface simplicity, several targets contain significant internal granularity, with multiple sub-options, occupational category selections and layered policy requirements.^[7] The detail rewards careful analysis.

A Non-Regression Scheme in Target-Setting Clothing

The three-year compliance assessment cycle is central to the scheme's design. But the compliance test itself tells a different story to the one suggested by the scheme's framing.

The Act does not require employers to meet their targets. It requires them to meet or demonstrate improvement against their targets.^[4] That distinction is critical. An employer that commits to a 10 percentage-point reduction in its gender pay gap and achieves a 1 percentage-point reduction is compliant. An employer that commits to a 1 percentage-point reduction and achieves that reduction is also compliant. The nominated target is a commitment, but not the compliance threshold. The compliance threshold is whether you moved in the right direction at all.

What the scheme actually enforces is non-regression. The targets are not targets in a conventional sense. They are directional commitments with a pass-fail test underneath. The only scenario that produces non-compliance is standing still or going backwards.

That is an uncomfortable design for a scheme whose stated objective is to accelerate progress.

It also means the scheme's coverage is remarkably narrow. Employers must select three targets from a menu of 19, with at least one numeric. But WGEA collects data on all six gender equality indicators from every employer, every year. An employer could be regressing on several indicators while demonstrating marginal improvement on others and could achieve compliance. The data to identify where regression is occurring, or at higher risk, already exists. The scheme simply does not use it for targeting purposes.

This is where the design sits uncomfortably alongside the government's own regulatory principles. The Commonwealth's Regulator Performance Framework, set out in RMG-128, identifies 'risk based and data driven' regulation as a core principle of best practice, requiring regulators to 'manage risks proportionately' and 'leverage data and digital technology.'^[14] The Regulatory Policy, Practice and Performance Framework states that regulation must be 'targeted, risk-based and proportionate.'^[15]

The WGEA targets scheme bypasses current data and lets the employer select where it would like to be measured, rather than directing consequences at the risks the data reveals. Compare this to Payment Times Reporting, where the Regulator identifies the slowest payers using reported data,^[16] or to the Modern Slavery Act review, which recommended a declaration regime for the Anti-Slavery Commissioner to identify high-risk products and regions.^[17] In both cases, the regulator identifies the risk. Under the WGEA scheme, the employer chooses its own exam questions.

A genuinely risk-based approach might look quite different: using reported data to identify who requires targeting obligations, and the indicators the targets need to be applied to. The data infrastructure to support this already exists within WGEA's reporting framework. The question is why it was not used.

Uncertainty Managed by 'Reasonable Excuse'

The Act provides that an employer will not be deemed non-compliant if it has a 'reasonable excuse' for failing to meet or improve on its targets.^[4] This is the mechanism intended to address mid-cycle disruptions, including restructures, mergers and changes in workforce composition.^[4]

But neither the Act nor the Instrument defines what constitutes a reasonable excuse. The Senate Committee that reviewed the Bill recommended that the government provide full guidelines.^[18] As of the date of this article, no formal guidance has been published. For employers making three-year commitments in the current reporting window, this is a material uncertainty.

A World-First Without a Safety Net

This is not the first Australian transparency regime to retrofit consequences. Payment Times Reporting moved from pure disclosure to identifying the slowest and fastest payers, creating a stick and a carrot.^[16] The Modern Slavery Act review concluded that transparency alone had not driven meaningful change, prompting consultations on mandatory due diligence.^[19] The WGEA targets scheme goes further, dovetailing directly into government procurement. It is arguably the most innovative approach to 'transparency-plus' regulation in Australia. It may also be the riskiest.

What is unusual for a scheme of this novelty is the absence of a built-in review mechanism. The Law Council recommended an independent review after a suitable period.^[18] That recommendation was not adopted. The Payment Times Reporting Act included a statutory review. The Modern Slavery Act included one. Both produced findings that led to significant reforms. The WGEA targets scheme has none.

There is an irony in this. The government considers three years an appropriate period for employers to forecast workforce outcomes and commit to measurable targets. But it was unable to determine an appropriate period for reviewing whether the scheme itself is achieving its objectives.

What This Means for Employers

The private sector reporting window is open. Target selections must be lodged by 31 May 2026.^[4] That leaves weeks, not months, to analyse baseline data, assess the targets menu, consult internally and make selections that bind the organisation until 2029.

Employers who have not yet examined their baseline should know that it already exists: it is the data submitted in the 2025 Gender Equality Report.^[4] Understanding that data before selecting targets is essential.

For employers that supply government, the stakes are commercial: non-compliance means no certificate of compliance, which means ineligibility for government contracts.^[9] For employers with M&A activity on the horizon, target compliance risk may become a factor in due diligence, as acquiring an entity on track to miss its targets could jeopardise procurement eligibility.

The scheme sits at the intersection of data, law and policy. Getting target selection right requires an understanding of all three.

RGC Advisory is a specialist advisory and legal firm focused on regulation, governance and compliance. Our team includes former regulators who have designed and administered frameworks like the ones discussed in this article. We work across WGEA, Payment Times Reporting and Modern Slavery — regulatory frameworks where data, legal obligations and government policy converge — and we understand how these systems are designed and operate. We support employers with baseline data analysis, target selection strategy, compliance planning and ongoing reporting obligations. Get in touch to discuss how we can help.

This article is for informational purposes only and does not constitute legal advice.

References

1. Workplace Gender Equality Act 2012 (Cth), s 2A.
2. PM&C, 'Workplace gender equality'; WGEA, Australia's gender equality scorecard 2023–24.
3. Workplace Gender Equality Amendment (Setting Gender Equality Targets) Act 2025 (Cth); commenced 4 April 2025.
4. WGEA, 'Gender equality targets FAQ'.
5. Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Act 2023 (Cth).
6. Explanatory Memorandum, Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023.
7. Workplace Gender Equality (Gender Equality Targets) Instrument 2025 (Cth).
8. WGEA, 'Targets Menu Guide', February 2026.
9. WGEA, 'Certificate of compliance'. Note: the Commonwealth Procurement Rules were updated on 17 November 2025, increasing the general procurement threshold from $80,000 to $125,000 for non-corporate Commonwealth entities.
10. Workplace Gender Equality Act 2012 (Cth), as amended, s 19D.
11. Department of Finance, 'Workplace Gender Equality Procurement Principles'.
12. Explanatory Memorandum, Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024, [2].
13. WGEA, Australia's gender equality scorecard 2023–24.
14. Department of Finance, Resource Management Guide 128: Regulator Performance, Principle 2.
15. Department of Finance, Regulatory Policy, Practice and Performance Framework.
16. Payment Times Reporting Amendment Act 2024 (Cth). See also Treasury, 'Government response to the Statutory Review of the Payment Times Reporting Act 2020'.
17. Attorney-General's Department, 'Modern Slavery Act'.
18. Law Council of Australia, Submission to the Senate Finance and Public Administration Committee on the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024, 16 December 2024.
19. Australian Anti-Slavery Commissioner, Getting the balance right: proportionate due diligence to address modern slavery risks, 4 September 2025.
20. Working for Women: A Strategy for Gender Equality, Australian Government, March 2024.