The government has published new guidance on ethnicity pay gap reporting and positive action in the workplace.
The guides, published by the Race Disparity Unit, Equality Hub and the Department for Business and Trade, have been published as part of an update on the government’s progress against its Inclusive Britain action plan which was announced last year.
The ethnicity pay gap reporting guidance for employers is the first government document to set out a consistent approach to measuring pay differences between ethnic groups. It covers what data they should collect and how to interpret it, deciding what data to request from payroll teams, and what questions organisations should ask when seeking to understand the causes of their pay gaps.
While ethnicity pay gap reporting is not a legal requirement, many organisations choose to publish this data alongside their gender pay gap reports.
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The guidance states that ethnicity pay reporting is much more complex than gender pay reporting because of the large number of ethnic groups that can exist in an organisation. Where there are small numbers of people who belong to a particular ethnic group, or a single employee, it could also lead to identification.
The government has previously said ethnicity pay gap reporting would not be compulsory as there were barriers to collecting data, making it difficult for meaningful comparisons to be made.
The positive action in the workplace guidance explains how positive action to help people with a particular protected characteristic overcome certain barriers can be done lawfully, without disadvantaging other groups. It outlines the difference between positive action and positive discrimination, including in areas such as recruitment and promotion.
Sandra Kerr, race director at Business in the Community (BITC), welcomed the publication of the guidance.
She said: “It is good news that the government has published voluntary guidance for employers on ethnicity pay gap reporting. This shows that the government clearly understands that there is a discrepancy in pay for people from Black, Asian, Mixed Race and other ethnically diverse backgrounds.
“While the voluntary guidance is a welcomed step, BITC has been clear that with 18.3% of people in England and Wales from a diverse ethnic background, the only way to close the ethnicity pay gap is to make reporting mandatory for businesses with over 250 employees. Publishing ethnicity pay gap data is the easiest part of the action needed to close the pay gap; the real work will begin when we know the scale of the problem and the collective response needed to address it.
“I hope that the commitment the government has shown to providing voluntary guidance for employers will be followed swiftly by making ethnicity pay gap reporting mandatory.”
In 2021, BITC found that 23% of ethnically diverse people in the UK felt their ethnic background was a barrier to making the next step in their career. This was higher for Pakistani (32%) and for Black African (38%) respondents.
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Minister for women and equalities, Kemi Badenoch, said: “The groundbreaking Inclusive Britain Action Plan was an excellent first step, and we will continue to deliver on its promises, tackling the complex causes behind racial disparities with data-driven action.
“We must all work together to ensure no-one is held back by their race, social or ethnic background.”
