The proposed reforms would introduce a new requirement for employers with 500 or more employees to commit to achieve, or make progress on, their measurable gender equality targets.
Employers would be required to pick three targets which could include gender composition of the workforce, equal remuneration between women and men, and consultation with employees on issues concerning gender equality in the workplace.
Employers would then have a three-year period to achieve or improve on those targets.
The average total remuneration gender pay gap stands at 21.8 per cent, a submission says. (Julian Smith/AAP PHOTOS)
The failure to either set a target or make progress towards it could result in an employer being publicly named, and impact their eligibility for government procurement and ability to be considered for funding and grants.
A parliamentary committee will hear evidence from witnesses from the Australian Council of Trade Unions, Diversity Council Australia and Australian Human Rights Commission as well as employer groups.
In its submission to the committee, the Workplace Gender Equality Agency (WGEA) welcomed the proposed changes and said requiring target setting could accelerate progress in workplace equality.
The agency said many of Australia's larger employers had already embraced target setting to drive progress on gender equality, but there was evidence there was more work to do.
"The headline gender equality measure is the average total remuneration gender pay gap, which is currently 21.8 per cent," the submission said.
"In the last 12 months it decreased by a small amount (0.6pp). Further, only 21 per cent of employers have an average gender pay gap in the optimal target range within and including +/-5 per cent."
WGEA data showed while many employers were already setting targets across several different metrics, more needed to be done when it came to setting targets for indicators other than women's representation in management.
Meanwhile, the Australian Human Rights Commission recommended the requirements be extended to businesses with 100 or more employees, rather than the proposed 500.
In its submission, the commission said extending the target-setting requirement to more businesses would create a significant impact and achieve greater cultural change.
The commission also recommended introducing a target to require employers to report on the uptake of flexible working arrangements by people of all genders.
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