Mind the (Ethnicity Pay) Gap

20 December 2019

As pay gaps go, most of us have heard plenty about the shocking gender pay gap which still exists today. It has dominated the news and we have seen positive steps to address it by the way of compulsory gender pay gap reporting. But what about the ethnicity pay gaps (EPGs)?

In July 2019, the ONS published statistics revealing staggering pay gaps of up to 20% between white employees and other ethnic groups. What are companies doing to address the issue of inequality regarding the pay of their ethnic minority employees?

Later that year in October 2019, the Bank of England’s Chief Economist Andy Haldane delivered a speech which examined gender and ethnicity pay gaps in the UK with one of the main findings being that:

Pay gaps have not only been large but persistent, strikingly so among ethnic minorities even once we make allowances for differences in skills and job attributes. This suggests that, despite progress, much remains to be done.”

We may be waiting a while before any legislative action is taken to address EPG. Whilst the Labour and Liberal Democrat Parties encouragingly included within their manifestos the introduction of EPG reporting, the Conservative Party’s manifesto was surprisingly silent on it. With a new government now in place, ‘getting Brexit done’ will be at the top of their list with EPG likely to be far down it, if on it at all. 

Despite the increasing uncertainty behind the government’s agenda on EPG, employers can still take action. Some leading employers have already undertaken voluntary EPG reporting to promote better equal opportunities, diversity and inclusion within their organisations including Deloitte, PWC, Bank of England, KPMG, UCL, The Civil Service and EY.

Whilst these efforts are welcomed, the uptake on voluntary reporting remains low. Further the different approaches and methodologies used in reporting ethnicity pay information limits comparability. There is clearly a case for having mandatory EPG reporting with a consistent and standardised approach to drive meaningful change, as acknowledged in the previous government’s consultation paper on the introduction of mandatory reporting of ethnicity pay information by employers.

It is recognised that there are likely to be challenges in creating and introducing a workable system of reporting on EPG. This should not however deter or delay appropriate action being taken.

EPG reporting would be a vital first step in seeking to eliminate pay disparities between ethnic groups. It would not only help to identify, understand and raise awareness of the problem of EPG, but will also be critical in promoting transparency over pay practices and urging employers into taking decisive and positive action to strive towards closing these gaps and achieving fair and equal treatment in pay for all regardless of ethnicity.

One of the points under the previous government’s consultation included whether employers who identify disparities in their ethnicity pay in their workforce should be required to publish an action plan for addressing these disparities. This would most certainly help towards tackling pay discrimination at work.

It is time for policy-makers and organisations to put their money where their mouth is, not only talking the equality talk but walking the equality walk.

About the author

Bina is a highly accomplished employment law specialist with considerable experience in dealing with all aspects of the employment relationship from recruitment to termination.

Bina acts for both employers and senior executives across various sectors in providing clear, tailored and strategic advice and dealing with disputes in the most effective wayShe has particular expertise in the legal, financial and other professional services and higher education sectors as well as with luxury brands.

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