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Ethnicity pay reporting

Employers may be forced to publish their ethnicity pay gap.

In 2017 a report on Race in the Workplace set out a range of actions for business and government to help improve employment and career prospects for those from ethnic minority backgrounds. The government’s response at the time was that the case had been made for ethnicity reporting but it expressed a preference for a voluntary, business-led approach. A report a year on looking at what’s actually happened has found that limited progress has been made. The government has therefore opted to go down the mandatory route, in all likelihood along the lines of gender pay gap reporting and has published a consultation paper looking at how this can be implemented. The expressed aim of its consultation is to ‘agree a consistent methodological approach which drives meaningful action, while remaining proportionate and without adding undue burdens on business’. The deadline for responses to the consultation is 11 January 2019 but it’ll probably be 2020 before mandatory reporting comes into force.

The consultation suggests that mandatory reporting should be restricted to those employing more than 250 staff which would cover around 10,000 employers in England Wales and Scotland.

As for how it would work in practice, the consultation poses various options to employers including whether following current gender pay reporting would be helpful or data might be published instead according to pay bands or average hourly earnings. It also asks for comments on what contextual data might additionally be disclosed to aid interpretation and understanding of the pay data produced.

As well as the consultation, a new Race at Work Charter has been launched, which will commit businesses to a set of principles and actions designed to drive forward a step change in the recruitment and progression of ethnic minority employees.

Commenting on the proposals, Beverley Sunderland says that it’s important that ethnicity pay gap reports looked at the diversity of organisations’ senior teams. ‘The younger generation coming into business are very concerned about the diversity of an organisation they are joining, and this will allow those businesses with a diverse and inclusive workforce to make this very clear in the figures they are reporting. This in turn will attract top talent to their organisations, who know they can progress irrespective of their sex or ethnic background’.