Gov’s failure to launch ethnicity pay gap reporting ‘perplexing’

While some employers have started to publish their ethnicity pay gap figures, it is currently not mandatory for all businesses to do the same.

As such, MPs are urging the government to introduce such a scheme, similar to that of mandatory gender pay gap reporting.

According to the Guardian, the House of Commons women and equalities committee (WEC) shared that there is no excuse for failing to tackle racial inequality in UK workplaces.

The cross-party group of MPs stated in a report that large firms should be required by law to publish data on employee salaries, which they believe should be enforced from April 2023.

They added that it would mark the “first step” in addressing pay disparities between employees from different ethnic backgrounds. The group reflected on research too which suggested that efforts to boost racial inequality could enhance the UK’s economy by £24bn every year.

“The government’s failure to move forwards on ethnicity pay gap reporting is perplexing,” commented Caroline Nokes, the Conservative MP who chairs the committee.

“We already have the systems in place to start reporting on the ethnicity pay gap, as well as a clear impetus: tackling inequality benefits not only marginalised groups, but the whole economy.

“The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration.”

Last year other appeals came from the Confederation of British Industry (CBI), Trades Union Congress (TUC) and Equality and Human Rights Commission, who also urged ministers to introduce ethnicity pay gap reporting.

However, a government spokesperson added: “We want to ensure everyone, whatever their background, has equal opportunity to succeed and achieve on merit.

“We are considering the findings of the Commission on Race and Ethnic Disparities independent report, which included recommendations on ethnicity pay reporting, alongside feedback to our consultation on this issue. We will set out our response to this – as well as the Women and Equalities Committee report – in due course.”

‘Building inclusion’

One business who decided to publish its ethnicity pay gap figures is online fashion retailer ASOS.

Last year it revealed that its median pay for ethnic minority employees is now 5.9% higher compared to their white counterparts, a 21.2% improvement in the overall median ethnicity pay gap since 2020.

Speaking to Reward Strategy, ASOS’ head of belonging and engagement Daisy Black, explained that the decision was made to build a “a truly inclusive culture”.

When asked whether reporting should be mandatory, Black concluded: “We think people should be able to hold companies accountable on progress and we’d like to see more businesses take the step to publish their ethnicity pay gap data.

“Rather than waiting for legislation, businesses can help drive change faster, that’s what we’re aiming for.”

Listen to Jerome Williams, EDI lead at Sovereign Housing Association’s thoughts on pay gap reporting in a previous Friends in Benefits episode here.