Consultation Process For Ethnicity Pay Gap Reporting Started In The UK

According to an announcement by the UK government, firms there might now have to furnish data on the pay gap in their firms on the basis of ethnicity.

The government has initiated a consultation process aimed to get opinions from employers about how to include ethnicity passed pay in their reporting. The government noted that there are just a handful of companies that publish such reports. The consultation process will close on 11 January 2019 and is seeking information from employers about what should they publish in order to allow for “decisive action” on workplace diversity without bringing in any undue burden on businesses.

This announcement was made by UK primeminister Theresa May during the first anniversary of the Race Disparity Audit by the government which was undertaken to examine the treatment of meted out to people from various ethnic backgrounds in the society. The audit identified some serious differences in pay and job progression of employees who belonged to the black and minority ethnic (BAME) communities compared to their white counterparts.

In her government-commissioned independent review into race in the workplace, published in February 2017, a recommendation by Baroness McGregor-Smith proposed publishing of ethnic pay data by businesses that have more than 90 employees. Currently only about 11 per cent of all the businesses surveyed by the business body Business in the Community (BITC) was found to be collecting such data.

There can be a boost of about £24 billion annually, or 1.3% of GDP to the UK economy by reducing and eliminating barriers that hinders participation and progression of people of all ethnicities at workplace, said the McGregor-Smith review. But it is not just the economics of tackling inequality of opportunity in the workplace but its social impact as well that the UK government wants to focus on ion this consultation process.

“This consultation is further evidence of the government’s commitment to drive a market-led improvement in diversity in the workplace through its transparency agenda,” said diversity and inclusion expert Susannah Donaldson of Pinsent Masons, the law firm behind Out-Law.com. “The recent requirement for companies with more than 250 employees to report their gender pay gap demonstrates that the government stands ready to legislate for mandatory reporting in this area if change is not forthcoming.”

“However, measuring the ethnicity pay gap is more complex than measuring the gender pay gap, as there are multiple ethnic groups with different gaps, and many people with mixed ethnicity. Very few employers are currently collecting data on their ethnicity gaps and even fewer have reported this data publicly on a voluntary basis,” she said.

According to the UK government, the aim of the new consultation process is to develop “a consistent methodological approach” to pay data reporting “which drives meaningful action while remaining proportionate and without adding undue burdens on businesses”.

Despite the fact that there are a small number of employers who have already publishing such data on a voluntary basis, the difference in their approaches “limit comparability” while “mak[ing] it more difficult for employers and employees to understand what the data is showing and what action should be taken as a result”, said the government. .

(Adapted from Independent.co.uk)

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