Fourth report - Ethnicity pay gap reporting

The Government has acknowledged that ethnicity pay gap reporting should be mandatory. Businesses are ready for Ministers to follow through on this commitment and bring forward legislation. We recognise that capturing and reporting ethnicity pay gap data is a more complex exercise than for gender, especially given disproportionate sample sizes of ethnicity across the UK. Solutions are available as long as employers are willing, and the purpose of the exercise is clear. Ethnicity pay gap reporting is not about producing a league table or punishing organisations who, due to geographic location, may not have access to the same talent pool. A pay gap is an indicator for employers to identify, understand and address trends in ethnic disparities across their own workforce.

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