Mandatory Ethnicity Pay-Gap Reporting Will Not Be Introduced
The Government has responded to the report of the Commission on Race and Ethnic Disparities.
Ethnicity Pay-Gap Reporting
A report published by the Commission on Race and Ethnic Disparities last year made a number of recommendations around how ethnic and racial inequalities should be addressed across society. The Government has now responded to the report, confirming ethnicity pay gap reporting will be introduced on a voluntary basis only.
If an organisation chooses to report its ethnicity pay gap, the Government has confirmed it will also require publication of a diagnosis and action plan, which should explain why any pay differential exists, and what action will be taken to close the gap. It is expected that BEIS will publish further guidance this summer to help support employers who wish to report on their ethnicity pay gap.
In addition to the clarification, the Government has provided on ethnicity pay gap reporting, it has also confirmed additional funding will be provided for the Equality and Human Rights Commission. Updated guidance for employers on positive action will also be published by the end of the year, and a new 'Inclusion at Work Panel' will be established by Spring 2023. The function of the panel will be to provide diversity resources to employers.
What Can Employers Learn from the Report?
Whilst ethnicity pay gap reporting is not going to be made mandatory, the report demonstrates the continued importance of diversity and inclusion in the workplace. In respect of employer policies and the language used in the workplace, it is also worth noting that the Government has accepted the Commission's recommendation that the acronym BAME (Black, Asian and minority ethnic) is unhelpful and that it is usually more appropriate to consider individual ethnic groups rather than to draw a binary distinction between the ethnic majority and ethnic minorities.