Executive Summary

Employers with 500 or more employees must select and work towards three gender equality targets over a three‑year cycle. Targets must be chosen from a legislated set of 19, including at least one numeric target. The first selection point will be the 2026 reporting year, based on each employer’s 2025 baseline. Non‑compliant employers risk public naming and loss of eligibility for Commonwealth procurement opportunities. The reforms are designed to convert awareness of gender gaps into tangible action and measurable progress.

What are the changes

Employers with 500 or more employees will now be legally required not only to report gender equality data each year, but also to set specific targets from a prescribed list and demonstrate measurable progress against them.

The new targets framework marks a significant shift in Australia’s approach to workplace gender equality. While the existing Workplace Gender Equality Act 2012 (Cth) (Act) has required employers to report annual data since 2013, after the 2021 statutory review, the government concluded that reporting alone was not driving consistent action to close gender pay gaps or improve outcomes across key gender equality indicators. The new regime is intended to bridge that gap by ensuring reporting translates into deliberate, measurable commitments.

The move also reflects broader global momentum toward greater transparency and accountability on gender equality. By adopting a legislated target‑setting framework, Australia becomes one of the first jurisdictions to mandate structured progress over time rather than relying purely on disclosure.

Who the framework applies to

The obligations apply to designated relevant employers, specifically, organisations that directly employ 500 or more employees in Australia under a single ABN. This headcount includes all full‑time, part‑time, casual and fixed‑term staff but does not include independent contractors.

Employers with fewer than 500 employees are not captured but may voluntarily adopt elements of the framework if they wish to align with emerging best practice.

Targets for employers to set

Every covered employer must select three gender equality targets from a legislated menu of 19 options, each linked to the gender equality indicators already familiar from annual Workplace Gender Equality Agency (WGEA) reporting. The Workplace Gender Equality (Gender Equality Targets) Instrument 2025 (Cth) sets out both numeric targets, such as increasing representation of the under‑represented gender in management or reducing organisational gender pay gaps, and action‑based targets, such as undertaking gender pay gap analyses or improving employer-funded parental leave.

At least one of the three targets must be numeric, ensuring that employers commit to a measurable outcome rather than relying solely on policy‑based actions. Employers will need to meet each target or show clear improvement by the end of the cycle.

When the new requirements take effect

Target selection begins in the 2026 reporting cycle, aligning with existing WGEA lodgement windows. Employers must select their targets between 1 April and 31 May 2026.

To support the process, WGEA will issue a Baseline Report using each employer’s 2025 reporting data, helping organisations understand their starting point before choosing their three targets. This baseline then forms the foundation for the three‑year assessment cycle, which for most employers will conclude in 2029.

How progress will be judged

At the end of the three‑year period, WGEA will review whether an employer has met each selected target or has made demonstrable progress. This assessment will be guided by the definitions and requirements set out in the Gender Equality Targets Instrument, which prescribes the structure and wording of each target option.

The assessment framework is designed to create transparency for employees, investors, customers and the wider community, while encouraging organisations to take sustained and evidence‑based steps toward improving workplace gender equality.

What happens if employers don’t comply

Although the regime does not introduce monetary penalties, if an employer does not meet, or demonstrate improvement against, each of their three targets at the end of the 3-year target cycle, they are non-compliant with the Act, and the consequences are material. WGEA may publicly identify non‑compliant employers, and those employers may lose their WGEA-issued Certificate of Compliance, which is a prerequisite for taking part in certain Commonwealth procurement, grants and funding opportunities.

A non-compliant employer will be given the opportunity to provide WGEA with an explanation for the non-compliance. WGEA will assess the reasonableness of an employer’s excuse on a case-by-case basis. Where WGEA accepts an excuse as reasonable, the employer will still be non-compliant, but will not be publicly named as non-compliant.

Beyond regulatory consequences, non‑compliance carries reputational and operational risks. Failing to engage meaningfully with gender equality expectations can damage an organisation’s reputation, affect employee trust and retention and place it out of step with contemporary workplace standards.

How employers should prepare

Preparation should start with data. WGEA recommends employers undertake a comprehensive gender pay gap analysis in the lead‑up to 2026 and ensure their human resources and payroll systems can support the data collection required for target monitoring.

Employers should also begin reviewing the 19 available targets and identifying which options best align with the organisation’s workforce profile, gender equality challenges and existing diversity programs. WGEA’s supporting materials, including FAQs, the forthcoming Targets Menu Guide and masterclasses, will help employers assess suitability and design effective implementation strategies.

Please contact us if you would like guidance on how these changes apply to your organisation.

This article was written by Jessica Nicholls, Partner, and Maggie Feuerherdt, Associate.