Mandatory Ethnicity Pay Gap Reporting Up for Debate in Parliament

The petition, launched in March 2020 has been signed over 109,000 times. The petition states that the introduction of mandatory ethnicity pay gap reporting will highlight instances of race or ethnicity based inequality within the workplace, so that they can be addressed.

According to a study conducted by Business in the Community in 2018, only 11% of UK employers were actively capturing ethnicity pay data. The ethnicity pay gap petition followed increasing pressure for leaders to take action on this issue. Baroness McGregor-Smith recommended the introduction of ethnic pay gap reporting legislation in her 2017 report 'Race in the Workplace'.

The issue has gathered increasing momentum in recent months and following Black Lives Matter protests in cities across the UK, the Prime Minister pledged to establish a commission investigating all aspects of racial inequality in the UK. The Equalities Minister has been assigned to oversee the review to examine all aspects of inequality including in employment.

If an ethnicity-based pay gap reporting framework is introduced, it is expected that it would follow a similar framework to that already in place for the gender pay gap whereby large private and voluntary sector employers currently must publish:

• overall gender pay gap figures for relevant employees, calculated using both the mean and median average hourly pay
• the proportion of men and women in each of the four pay bands (quartiles), based on the employer's overall pay range - this will show how the gender pay gap differs across the organisation at different levels of seniority
• information on the employer's gender bonus gap (that is, the difference between men and women's mean and median bonus pay over a 12-month period)
• the proportion of male and female employees who received a bonus in the same 12-month period

The Government consultation on ethnicity pay reporting closed in January 2019 and the outcome is awaited. At the time of writing, the Government is yet to respond to the petition and set a date for the parliamentary debate.

For more ethnicity pay gap reporting information, please contact Eleanor Boyd in our Employment Law team on 07393 148 143, or complete the contact form below.