Striving for equality: Ethnicity Pay Reporting

15th October 2018 Employment

In April this year, the spotlight on workplace inequality became brighter than ever when companies with over 250 employees were legally obliged to publish salary and bonus figures for the purpose of highlighting and then addressing their gender pay gap. Today, the Government has announced a further step in tackling workplace inequality, with a view to increasing ethnic minority representation in the workplace, by publishing a consultation on Ethnicity Pay Reporting.

The consultation outlines a number of options and will ask questions as to what ethnicity pay information should be reported by employers, to ensure meaningful action, and considers who should be expected to report. The report will look to disclose disparities between the pay of employees from a minority ethnic background and those of their white colleagues. The consultation is open until January 2019 and suggests:

  • one pay gap figure, comparing average hourly earnings of ethnic minority employees against that of white employees;
  • several pay gap figures for different groups;
  • ethnicity pay information by £20,000 pay band; and
  • ethnicity pay data by quartile.

It also asks whether employers should publish an action plan explaining how they are going to tackle any disparities in pay.

This announcement comes one year after the Government’s race disparity audit, which found that people of an ethnic minority are twice as likely to be unemployed than white British adults.

Ethnicity Pay Reporting is expected to mirror elements of the Gender Pay Gap Regulation and make it mandatory for Companies with more than 250 employees to publish their Ethnicity Pay Gap Report. Whilst some organisations have already considered their ethnicity pay gap such practices are rare, with the Equality and Human Rights Commission (EHRC) reporting that only 3% of employers collating relevant data.

The Government has also launched a new Race at Work Charter, which aims to commit employers to a set of principles that will help improve recruitment and progression for those from ethnic minority backgrounds. This has been signed by major employers including NHS England, Lloyds Banking Group, KPMG and RBS, but the full details of the Charter are yet to be released.

Depending on the type and accuracy of the date to be collated and published, Ethnicity Pay Reporting will hopefully prove a useful tool in creating inclusive, diverse and talented workforces where ethnicity and race are not a determining factor in recruitment, pay or promotion.

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Charlotte Beeley is a Solicitor located in Manchesterin our Employment department

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