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Ethnicity Pay Gap Consultation

Three quarters of employers would support mandatory collection and release of data on the pay gap between staff of different ethnicities.

These findings came from a consultation exercise launched by Theresa May in October 2018 and documents leaked to the BBC.

The objective of the consultation was 'to enable government and employers to move forward in a consistent and transparent way. Consultation responses will inform future government policy on ethnicity pay reporting.'

The now closed consultation can be found here:

The consultation received 321 responses, including 93 from private sector employers, 42 from public sector employers and 67 from business organisations. Of these groups, an astounding 73% supported mandatory ethnicity pay gap reporting for organisations with more than 250 members of staff.

The Government is yet to respond to the findings but a petition calling for the introduction of the policy gained more than 130,000 signatures earlier this year - meaning the issue should be debated in Parliament. Responding to the petition in July, the Department for Business, Energy and Industrial Strategy said it was still analysing the consultation and promised to respond by the end of the year, at the latest.

Further, the consultation summary states that respondents had mixed views on whether pay gap reporting should be between white and all black, Asian and ethnic minority staff, or a breakdown of ethnic groups. With calls increasing to replace acronyms such as BAME and to have individual ethnicities more accurately identified, this debate is likely to continue and rightly so; If we are to collect and publish data, such data should be accurate and better reflect the demographics of our society, to enable businesses to better improve their diversity objectives.

Evidence already exists that diversity is better for business. A study by PWC earlier this year found that the percentage of businesses calculating their ethnicity pay gap data has risen by 18% over the last two years. They found that in 2020, almost one quarter (23%) of businesses were now calculating their ethnicity pay gap, compared to just 5% of companies in 2018. In conclusion, businesses want to know and show, their data.

Earlier this year, business leaders, including Lord Karan Bilimoria, president of the CBI, wrote to Boris Johnson calling for a mandatory duty to be introduced. Given the consultation responses and the findings of the PWC study, it is clear that the majority of business leaders believe it is not only the right thing to do but that it make business sense.

There is still a long way to go, and with our Government grappling with pressing issues such as Covid and Brexit, delay is inevitable. All the more reason to have effective pressure groups and robust public scrutiny to keep the issue in the spot light. Afterall, gender pay gap reporting, only came into effect in April 2018.

Ready to discuss how your workplace can tackle inequalities and pioneer workplace improvements? Get in touch with Diversity+.



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