The Confederation of British Industry, Trades Union Congress and Equality and Human Rights Commission have all called for a clear timetable for the introduction of mandatory ethnicity pay gap reporting.

They argue mandatory reporting would highlight pay disparities, and the lack of minority representation in senior positions with the hope this would push employers towards action.

This follows the findings of the Commission on Race and Ethnic Disparities, published on March 31, 2021, which was set up by the Prime Minister in 2020 to identify racial disparities and inequalities in Britain and ways to address them. However, the Commission findings did not recommend mandatory pay gap reporting. Instead it recommended investigating “what causes existing ethnic pay disparities by requiring the publication of a diagnosis and action plan for organisations who voluntarily publish ethnicity pay figures”.

In addition to this, we also continue to await the Government’s response to its consultation on introducing mandatory ethnicity pay gap reporting, launched in October 2018.

The consultation asked a number of questions, including:

  • what ethnicity pay information should be reported
  • which employers should report ethnicity pay information
  • how employers can overcome the challenges of collecting data
  • whether employers who find a disparity should be required to include an action plan

The Government considers that mandatory ethnicity pay reporting alongside gender pay gap reporting could provide a way of examining any potential overlapping effects of pay differences. For example, employers could consider whether women from an ethnic minority background are likely to experience greater pay differentials to men and women from a white background.

Although there is no current obligation to report ethnicity pay gaps, this could change and employers should be careful to remain up to date with their requirements.