HR Hub

Legislation requiring the mandatory reporting of ethnicity pay gaps will not be introduced.

This emerges from the government’s response, Inclusive Britain, to the 2020 report of the Commission on Race and Ethnic Disparities.

It had been thought that a mandatory ethnicity pay gap reporting scheme, along the lines of that for gender pay gap reporting, might be introduced – a 2018 consultation certainly seemed to favour this. However, in part to avoid imposing new reporting burdens on business as they recover from the pandemic, the government has opted for a voluntary approach. Its response states that it recognises ‘the significant obstacles for employers looking to create ethnicity pay gap mechanisms, including employee confidentiality, that allows meaningful comparisons to be made’. Therefore, the government will publish guidance to employers on voluntary ethnicity pay reporting in summer 2022. This will include case studies of those companies who are already reporting and is expected to assist employers in understanding and tackling pay gaps within their organisations and build trust with employees. It will encourage employers to use, where appropriate, specific ethnic groups rather than broader categories when publishing their data.

In addition, the EHRC is to receive increased government support for its enforcement activity to facilitate challenging race discrimination through investigations and supporting individual cases.