Tens of thousands of care and support workers - who are mostly women - will receive pay rises as part of today's $2 billion pay equity settlement, the government says.
In 2013, Kristine Bartlett, a professional caregiver, successfully argued in the Employment Court her low hourly pay rate was a result of gender discrimination under the Equal Pay Act.
The government confirmed this afternoon it had settled the case for about 55,000 state-subsidised care workers.
From 1 July, the predominantly female workforce will receive pay rises of about 15 to 49 percent, depending on qualifications and experience.
Prime Minister Bill English said the package would be delivered over five years.
"It will deliver a significant pay boost for some of the country's most dedicated and hard-working, but lowest paid, workers."
Health Minister Jonathan Coleman described the deal as the first of its kind.
"There has never been a pay rise like this in New Zealand," he told Checkpoint with John Campbell.
The funding boost would see the affected workers' wages increase to $19 to $27 per hour over the next five years, he said.
"For the 20,000 workers currently on the minimum wage of $15.74 per hour, it means on July 1 they will move to at least $19 per hour, a 21 percent pay rise.
"For a full-time worker, this means they will be taking home around an extra $100 a week, which is over $5000 a year."
Ms Bartlett said the settlement would give workers dignity and pride knowing they were being paid what they were worth.
After years of struggling on low wages, she said she hoped they would now have a bit left over to enjoy life.
"I'm just so happy for all the carers ... that can now live hopefully out of poverty and just live a normal life."
The deal affects workers in three government-funded service sectors: aged residential care, home support and disability services.
'Game-changer'
NZ Aged Care Association chief executive Simon Wallace said earlier today, before the details were announced, that the agreement would have a big impact on the sector.
"Caregivers will be paid more for the valuable work that they do," he said.
"That's good for the sector and it's a game-changer as far as attracting new people into our sector to work."
It was still too early to know if the private sector would raise wages for their employees too, he said.
BusinessNZ chief executive Kirk Hope said businesses would need to learn how to address potential pay gap claims, because it was the fair thing to do.
But he said it was critical that payment timeframes were put in place so they were not bankrupted in the process.
Where will the funding come from?
The government said the settlement would mostly be funded through extra budget allocations to Health and ACC, and would not affect other health funding including the provision of frontline health services in other areas.
ACC levies, which have been set for the coming years, might increase over the next decade to support the settlement, but the government said that was not definite.
Mr English said the government's books were in good shape, so it was in a strong position to be able to help more New Zealand families and it had the ability to settle these kinds of negotiations.
Legislation would be introduced to Parliament shortly to prescribe the minimum pay rates to ensure providers passed on the new wages to employees.
It would also extinguish all other pay equity claims made prior to 1 July 2017 for employees covered by the settlement.
Read the full statement from the government explaining the settlement.