Source · Select Committees · Women and Equalities Committee
Recommendation 2
2
The Government should introduce mandatory ethnicity pay gap reporting by April 2023 for all organisations...
Recommendation
The Government should introduce mandatory ethnicity pay gap reporting by April 2023 for all organisations that currently report for gender. Legislation should include the requirement for employers to publish a supporting narrative and action plan. The Government should produce guidance, with clear explanations on: (a) data protection to reassure employers how they can legally capture, retain and report ethnicity pay gap data; (b) methods for capturing, analysing and reporting ethnicity pay data; and (c) the body responsible for enforcement and what powers that body will have. (Paragraph 16) Ethnicity pay gap reporting 9
Government Response
Acknowledged
HM Government
Acknowledged
The Government has accepted the Commission on Race and Ethnic Disparities’ recommendation that ethnicity pay gaps should continue to be reported on a voluntary basis. As the Government noted when accepting that recommendation, ethnicity pay gap reporting is just one type of tool to assist employers in creating a fairer workplace. It may not be the most appropriate tool for every type of employer seeking to ensure fairness in the workplace. The Government does not want to impose new reporting burdens on businesses and will not be legislating for mandatory reporting. The Government will therefore support companies and organisations who want to publish data by providing guidance. The guidance will support employers to navigate the challenges associated with reporting as set out in the Commission’s report and subsequently by this Committee. BEIS has consulted with employers to identify issues and is currently working with experts to develop guidance which will enable employers to identify the causes of pay disparities and take relevant steps to mitigate them. The guidance will seek to address other challenges identified in reporting. For example, it will help employers to use, where appropriate, specific ethnic groups rather than broader categories when publishing their data. Different ethnic groups that share the same race can have very different outcomes. This means that a meaningful pay gap reporting standard for ethnicity will need to be different to one for gender reporting, which uses just 2 categories. The guidance will also help employers with reporting across demographically different areas. This will assist those organisations in parts of the country with very small ethnic minority populations who cannot reasonably be expected to produce meaningful pay reporting because the numbers are too low, to give a statistically reliable account of how they are performing. The guidance will cover data protection issues and methods for capturing, analysing and reporting ethnicity pay data as set out by the Committee in its recommendations. A key recommendation of the Commission’s report and of the Committee was that employers should produce a diagnosis and action plan, setting out the reasons for and steps to address the disparities. The guidance will support employers to achieve this. Government committed in “Inclusive Britain” to publish the guidance in Summer 2022.