0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Government launch consultation on Ethnicity Pay Gap Reporting

26 October 2018

Following the first gender pay gap reporting deadline earlier this year, the government have now launched a consultation looking at how organisations should disclose their ethnicity pay gap.

A small number of organisations, including the civil service, and some universities, have already chosen to voluntarily publish their ethnicity pay data. However as different methodologies were used, which limits comparability, the consultation is seeking views on the scope, method, challenges and benefits of ethnicity pay gap reporting.

The consultation identifies various methods for reporting ethnicity pay data although these methods are not without their own challenges. One approach suggested by the government is to present one pay gap figure comparing average hourly earnings of ethnic minority employees as a percentage of white employees. Whilst this mirrors the gender pay gap methodology and gives the advantage of simplicity, all classifications of ethnic minority groups would be rolled into one resulting in the differentiation in outcomes for different ethnic groups being lost.

An alternative approach suggested is to produce pay gap figures for different ethnic groups. This would therefore compare average hourly earnings of different ethnic minority groups as a percentage of white employees. This method would still combine ethnic minority groups, meaning variations within those groupings would not be highlighted. A number of contextual factors may also form part of the information including geographical variations, age variations and gender variations, making the methodology more complex, however this is a more instructive approach.

A final suggested method is to break down ethnicity pay information by pay bands or quartiles showing the proportion of employees from different ethnic groups by £20,000 pay bands or by pay quartiles. This would allow employers to identify where ethnic minorities are concentrated and the apparent barriers to progression, however the difficulty is that not all pay bands are structured and fixed which could therefore limit comparability.

The consultation suggests the government believes it is time to move to mandatory ethnicity pay reporting however it is very difficult at this stage to determine what this is going to look like in practice. Even once the scope and methodology is decided, the effectiveness of the reporting will still very much depend on whether employees are willing to state their ethnic origin.

The consultation is open until January 2019 here.

related opinions

Levy restrictions are killing learning

New research published today by the City & Guilds Group reveals that 92% of apprenticeship levy-paying employers want to see greater flexibility in how they can spend their apprenticeship allowance, with the rigidity of the current system holding many back.

View blog

Home Office to modernise right to work checks

In April 2018 a Right to Work Checking Service was launched to allow individuals to demonstrate their right to work in the UK. Individuals are currently able to review their right to work record online and share a code with their employer to allow them to gain access to the record.

View blog

Government proposals announced for new immigration system following Brexit

The Government has published its long awaited White Paper, outlining its proposals for a new immigration system following Brexit.

View blog

The Government’s Good Work Plan published

The Government have claimed it’s the biggest reform of employment law in 20 years but with no draft legislation or even any dates or commitments to legislate, what exactly did the government announce yesterday?

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up