Opinion

Ethnicity pay gap reporting

Published: 23rd July 2020
Area: Corporate & Commercial

Ethnicity pay gap reporting

No one could have escaped news of the shocking incident of the death of George Floyd at the hands of the police in America. This, along with the Black Lives Matter movement, has further highlighted inequalities that BAME individuals suffer in today’s society.

The spotlight has also turned to the workplace and has refreshed calls for mandatory ethnicity pay gap reporting.

Back in January 2019, the government closed a consultation on mandatory pay gap reporting; it has yet to publish its conclusions.

However, in the meantime, a parliamentary petition was launched after Baroness McGregor–Smith, a government advisor, emphasised the importance of mandatory ethnicity pay gap reporting. The petition, with over 100,000 signatories, called on the government to introduce mandatory ethnicity pay gap reporting in order to highlight instances of inequality within workplaces, meaning that they can be dealt with.

Commission on Race and Ethnic Disparities

The government response to the petition has been to set up a new cross-government Commission on Race and Ethnic Disparities, which will examine continuing race and ethnic inequalities in Britain and ways government can address those and improve lives. It goes on to state that further information will be published in due course.

Gender pay gap reporting

Business owners and HR teams will no doubt be aware of gender pay gap reporting for employers with over 250 employees. How has this worked in the context of equal pay? Well, it has brought gender issues to the forefront and has made companies consider, analyse and explain their gender pay gaps. It may not have solved the gender pay gap issue, but it has forced employers with over 250 employees to look at their gender pay gap, explain it and some have no doubt taken steps to rectify it.

Diversity and inclusion in the workplace

Organisations such as the Business in the Community have created a Race at Work Charter and encourage voluntary ethnicity pay gap reporting as well as setting out best practice for businesses interested in increasing their diversity. To date, around 282 companies have signed the Race at Work Charter.

Fundamentally, however, businesses have many conflicting priorities and this may not be at the top of their agenda. Accordingly, there is some attraction to implementing mandatory ethnicity pay gap reporting, in the hope that it will change the narrative and improve diversity in the workplace.

One of the issues highlighted in respect of ethnicity pay gap reporting is how to ensure that the reporting is meaningful and reliable and also to protect employee anonymity and avoid undue burdens on business. There are still many questions to be answered in relation to how ethnicity pay gap reporting would work in practice, and the government has said that it has consulting with businesses to work this out. What this will look like in practice remains to be seen but, as Baroness Ruby McGregor-Smith has highlighted, we have to start somewhere. After all, at the end of the day, diversity is good for business. We therefore watch with interest to see what steps the government takes next.

Read more about regulatory compliance in your workplace.

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