Race Pay Gap: Employers’ Reporting Obligations May Be Extended

A Race Disparity Audit conducted in 2017 found large variations in pay and opportunities between white British people and ethnic minorities. For instance, it was concluded that around 1 in 10 adults from a Black, Pakistani, Bangladeshi or Mixed origin were unemployed compared with 1 in 25 White British adults.

Against this background, the Government are currently in consultation over introducing the compulsory disclosure of information on pay gaps for employees from different ethnic groups. It is hoped that this may improve equal opportunities in the workplace which, in turn, is likely to benefit Britain’s economy. As part of the consultation, which is due to close on 11 January 2019, businesses are able to share their views as to what information should be published.

Lisa Moore of the Wilkes Employment Team comments, “It is anticipated that the extended reporting obligations will operate in a similar way to gender pay gap reporting. Nevertheless, it appears that reporting on race pay will be a more complex exercise and, as things stand, there as a lack of clarity as to what exactly would need to be reported.”

Amongst other things, the consultation raises the following questions:-

• Which employers will be bound by the new reporting obligations? Whilst it is most likely that this will apply to employers of 250 workers or more, it has previously been suggested that this could be extended to employers with as few as 50 workers.
• How do employers collect the requisite data? Accurate reporting will require individuals to divulge all necessary information to their employers. Individuals may not, however, wish to engage with the process. Care will also need to be taken by employers in collating such data to comply with any data protection obligations.
• How will ethnic groups be classified? The Office for National Statistics classifies individuals into 19 distinct groups. Alternatively, 5 more general groups are commonly used, namely, White, Asian, Black, Mixed and Other.
• What approach will be taken to reporting the data? This could be as simple as producing one figure comparing average hourly earnings of groups of employees or could compare earnings by pay band or quartile.
• What other contextual information should be disclosed? Specifically, information like age, gender and location of workers is likely to be highly relevant.
• Will an action plan be required where employers reveal disparities? If the template for gender pay reporting is adopted, there is no obligation for employers to produce any sort of action plan or narrative in relation to the data published.

Lisa Moore comments, “It is commendable that the Government is attempting to target discrimination against ethnic groups in the workplace. However, it remains to be seen if or how any disparities identified will be tackled and therefore if any improvements to equal opportunities are realistic.”

“There is also a question mark as to how accurate and meaningful any data published will be. In particular, the reporting requirement will not identify why certain ethnic groups might not be applying for particular jobs in the first place nor will it account for discrimination that may occur during recruitment processes.”

Please look out for further updates on this topic in due course.

To discuss anything arising from this update, please contact Lisa Moore on 0121 710 5847 or via email at [email protected]. You can also contact any other member of the Employment Team on 0121 233 4333