Mandatory Ethnicity Pay Reporting for Employers

Employer pay reporting obligations may be extended following the launch of a consultation on mandatory ethnicity pay reporting.

The consultation asks how data on ethnicity pay can be collected by employers and what information employers should publish.

The consultation follows an audit last year which showed significant disparities in pay for ethnic groups.

Questions raised in the consultation include:

• How to compare pay for ethnicity pay purposes – average hourly earnings as a percentage of white employees or by reference to £20,000 pay bands or quartiles and whether it would be helpful to mirror the gender pay gap methodology;
• Whether employers should be required to report pay gap figures for various ethnic groups or to report one pay gap figure for all ethnic groups;
• What contextual information should be provided (for example, age, geographic and gender variations);
• Should employers be required to publish an action plan to address any disparities in pay;
• How can rates of ethnicity self-reporting be improved by employers and should levels of self-reporting and non-disclosure rates be reflected in the information that employers are required to provide;
• What size of employer should mandatory ethnicity pay reporting apply to (all employers, employers with 50+, 250+, 500+ employees); and
• What support measures would assist employers?

Responses to the consultation will inform future government policy on ethnicity pay reporting. The consultation process closes on 11 January 2019.

It is anticipated that employers pay reporting duties will be extended to cover ethnicity in the near future.

The Government also announced action to ensure that the leaders of the UK’s key public services are more representative of the communities they serve and the introduction of a Race at Work Charter which aims to improve the career progression and recruitment of ethnic minority employees. The Charter commits businesses to a set of five actions: (i) the appointment of an executive sponsor for race; (ii) the capture of ethnicity data and a requirement to publicise progress; (iii) a commitment at Board level to zero tolerance of racial harassment and bullying; (iv) make it clear that supporting equality in the workplace is the responsibility of all leaders and managers; and (v) the support of ethnic minority career progression. The Charter already has a number of signatories from the public and private sector.