Should employers be required to report ethnicity pay data?

The Government has published consultation on requiring employers to publish their ethnicity pay figures.

One of the recommendations of a report by Baroness McGregor-Smith in 2017, “Race in the Workplace”, was that the Government should legislate for mandatory reporting of ethnicity pay data. As part of the Government’s response to that report, it stated that it expected businesses to take this forward voluntarily. A review in February 2018 reportedly shows that limited progress has been made across the recommendations of the report, and that just 11% of employees reported that their organisations collect data on ethnicity pay. In response, the Department for Business, Energy and Industrial Strategy (BEIS) is consulting on a mandatory approach to ethnicity pay reporting.

The consultation seeks views on mandatory ethnicity pay reporting by employers; sets out options; and asks questions on what ethnicity pay information should be reported by employers and who should be expected to report. The questions include:

What type of ethnicity pay information should be reported that would not place undue burdens on business but allow for meaningful action to be taken?
What supporting or contextual data (if any) should be disclosed to help ensure ethnicity reporting provides a true and fair picture?
Should an employer that identifies disparities in their ethnicity pay in their workforce be required to publish an action plan for addressing these disparities?
For a consistent approach to ethnicity pay reporting across companies, should a standardised approach to classifications of ethnicity be used?
What size of employer (or employee threshold) should be within scope for mandatory ethnicity pay reporting?
What support measures would be useful for employers?

Comment

Theresa May stated “Our focus is now on making sure the UK’s organisations, boardrooms and senior management teams are truly reflective of the workplaces they manage, and the measures we are taking today will help employers identify the actions needed to create a fairer and more diverse workforce.” As is recognised in the consultation paper, this is a complex and sensitive issue. The consultation will be open until January 2019.

In other news, the Government has announced a series of measures to “back businesses and entrepreneurs, support workers and ensure every part of the country benefits from the government’s modern Industrial Strategy.”

The new measures include:

Plans to ensure that tips left for workers will go to them in full. New legislation, to be introduced “at the earliest opportunity”, will set out that tips must go to the workers providing the service.
Proposals to help parents and carers in the workforce. The Government will consider creating a duty for employers to consider whether a job can be done flexibly, and make that clear when advertising.
Greater transparency on parental pay. The Government will consult on requiring employers with more than 250 staff to publish their parental leave and pay policies, so job applicants can make informed decisions about whether they can combine the role with caring for their family.

We will bring you further details of these measures as they emerge.

12 October 2018

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