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Ethnicity pay reporting - fifteen sign the pledge

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Ethnicity pay reporting - fifteen sign the pledge

Fifteen key UK businesses have committed to the principle of mandatory ethnic pay gap reporting ahead of any mandatory government measures.

Nearly one year after the introduction of mandatory pay gap reporting for gender, only around three percent of large employers voluntarily report on their ethnic pay gaps. The diversity campaigning group INvolve has now succeeded in gaining commitment from the fifteen, which include the Bank of England, BUPA, Deloitte, KPMG and Lloyds of London.

The ethnic pay gap

Research carried out by INvolve showed that white people earn between £67 and £209 more per week than those from different ethnic backgrounds with similar qualifications.

The Race Disparity Audit undertaken by Prime Minister, Theresa May, confirmed that average hourly pay for white people is higher than the average hourly pay for people from almost all other ethnic groups.

The Greater London Authority has published a 37.5% ethnicity pay gap.

The pledge

The fifteen companies have agreed to:

  • Call for mandatory ethnicity pay gap reporting for UK businesses
  • Work towards reporting the ethnicity pay gap ahead of any government mandate to do so
  • Bring about institutional change through visibility of data and open discussion of why the ethnicity pay gap exists within their organisations
  • Encourage other businesses to engage in voluntary reporting by endorsing a reporting framework laid out by Involve

Will legislation follow?

The government launched a consultation in October 2018 partly in response to the review undertaken by Baroness McGregor-Smith into ‘Race in the Workplace’ the previous year.  The consultation, which closed in January, sought views on whether there should be mandatory reporting of pay differentials between different ethnicities. The government is currently in the process of reviewing the responses.

A threshold of 250 employees has been suggested by the government, although the McGregor-Smith report recommended this be much lower at 50 employees.

It is likely that legislation requiring mandatory reporting will follow but, in the meantime, voluntary measures will help firms to identify their pay gaps and start to work towards eliminating them.