Do you report ethnicity pay gap figures?

The Government has published guidance for employers on ethnicity pay gap reporting.

In March 2022, the Government committed to publishing guidance in ‘Inclusive Britain’, its response to the Commission on Race and Ethnic Disparities. The aim of the guidance is to support employers across the UK who want to publish their ethnicity pay gaps and ‘develop a consistent, methodical approach to ethnicity pay reporting, which can then lead to meaningful action, while remaining proportionate and without adding undue burden on business’.

Guidance on ethnicity pay gap reporting

The guidance includes detail on:

Collecting employee ethnicity data, including complying with data protection provisions
How to prepare payroll data, including worked examples
Making the calculations
Understanding pay calculation results
Reporting the ethnicity pay calculations
Developing and publishing an employer action plan

The guidance acknowledges that although in many respects the detail mirrors the approach set out in guidance for gender pay gap reporting, ethnicity pay reporting is much more complex. Gender pay gap analysis only involves a comparison between male and female employees. Ethnicity pay analysis can potentially involve many ethnic groups, depending on the diversity of the workforce.

Comment

There is a statutory requirement for employers with at least 250 employees to measure and report gender pay gaps. Ethnicity pay gap reporting, however, is voluntary. There has been discussion for a number of years about whether ethnicity pay gap reporting should be mandatory and consultation on this issue was published in 2018. However, the Government confirmed last year that mandatory reporting would not be introduced and that employers would be supported with voluntary reporting.

This is the first Government guidance that explains how employers can report on their ethnicity pay, analyse and understand the results of their calculations; and develop an action plan to address any identified disparities.

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21 April 2023

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