Mandatory Ethnicity Pay Gap Reporting coming soon? No, it’s ‘voluntary’

(Updated 18th May 2023)

Mandatory Ethnicity Pay Gap Reporting Consultation starts

In October 2018 the Government started a consultation asking Employers to contribute their views on potential mandatory ethnic minority pay reporting. In brief, the options that are proposed are:

• One pay gap figure comparing average hourly earnings of ethnic minority employees as a percentage of white employees, or
• Several pay gap figures for different ethnic groups, or
• Ethnicity pay information by £20,000 pay bands, or
• Ethnicity pay information by pay quartile.

The Consultation also asks what employers should be expected to publish this data – all employers, those with 50+ employees, those with 250+ employees, those with 500+ employees, or another threshold.

You can see the full Consultation here – it closed on 11^th January 2019!  By 2021 nothing had happened, the Government had still not published a response to the consultation, and are obviously reluctant to legislate in this area.   In April 2021, a report by the Commission on Race and Ethnic Disparities in the UK said that Ethnicity Pay Gap reporting should be voluntary.  The Commission recommended though that the Government produce guidance to help Employers who choose to voluntarily report their pay gaps. Finally in April 2023 the Government have produced guidance on voluntary ethnicity pay reporting which you can see here.

The Consultation starts by saying:

“Reporting ethnicity pay information enables employers to identify – and then tackle – barriers to creating a truly diverse workforce. If there is a consistent approach to reporting, they can also benchmark and measure their progress by comparing themselves to other employers and learn from them. We know that these are complex and sensitive issues. This consultation asks for your views on how we can take forward our manifesto commitment to ask large employers to publish ethnicity pay data so we can establish the best and most meaningful approach to 4 drive change, while ensuring proposals are proportionate and do not cause undue additional burdens on business. By understanding and taking action to overcome the barriers faced by all ethnic groups in the workplace, we can put diversity at the heart of how we do business and do right by all working people.”

You can see details about current Gender Pay Gap Reporting here.