The next prime minister should resume efforts to introduce mandatory ethnicity pay gap reporting, preferably by April 2023, responsible business network Business in the Community has urged.
BITC called on Conservative Party leadership candidates, of which there are currently five in the running, to ensure they heed organisations’ call for the publication of ethnicity pay data to be made a legal requirement, in the same way that organisations with 250 or more employees are required report their gender pay data.
Earlier this year MPs on the Women and Equalities Committee suggested that April 2023 should be a target date for its introduction, and BITC has now said the next prime minister should aim for this.
Earlier this year the government said ethnicity pay gap reporting would not be mandatory, although it would “help” organisations to collect and disclose their data.
Last year, then business minister Paul Scully admitted that establishing an ethnicity pay reporting framework was considerably more challenging than for gender pay gap reporting, as the data was not “binary”.
Ethnicity pay gap reporting
Many organisations including Shell and KPMG voluntarily report on their ethnicity pay gap. The proportion of employers capturing ethnicity pay data has increased from 11% in 2018 to 19% in 2021, according to BITC.
Sandra Kerr race director at BITC, said: “The case for introducing mandatory ethnicity pay gap reporting has been made by business leaders time, and time again, but the government has been dragging its feet in bringing forward the relevant legislation to make this a legal requirement.
“With the current cost of living crisis, this brings another reason to the surface as to why mandatory reporting is needed. Mandatory reporting should be introduced by April 2023, at the latest, as it plays a vital role in ensuring that the UK has a truly inclusive economy that benefits people from all ethnicities and social backgrounds.
“I have always been clear that while reporting won’t solve everything, it will help businesses focus on where action is needed most. I hope the new prime minister understands that businesses want reporting to be made mandatory as they see it as a tool rather than a burden. Business leaders have been clear, and they are ready, so the ball is now firmly in the government’s court.”