The Government has recently released new guidance for employers on ethnicity pay gap reporting and positive action in the workplace. The guidance has been published as part of the Government’s Inclusive Britain strategy plan.
The guidance is the first Government document to outline a consistent approach to assessing salary differences amongst ethnic groups and covers:
- What data employers should collect and how to interpret it;
- What data to request from payroll teams; and
- The type of questions companies should ask when trying to ascertain the reasons for their pay gaps.
Although ethnicity pay gap reporting is currently not a legal requirement for businesses, many still choose to publish this data, in addition to their gender pay gap reports.
Previously, the Government has said that it will not be making ethnicity pay gap reporting mandatory for businesses due to the barriers they will likely encounter when collecting data, making it harder for meaningful comparisons to be made.
Positive action in the workplace guidance
The guidance relating to positive action in the workplace highlights how employers can choose to use positive action measures in the Equality Act 2010 to enable employees to overcome specific barriers and improve the overall view of what your company represents.
Positive action permits further help to be provided for groups of employees who share the same ‘protected characteristic’ without putting a disadvantage to other groups. The guidance outlines the differences between positive action and positive discrimination in certain areas, such as recruitment and promotion.
Race Director at Business In the Community (BITC), Sandra Kerr, welcomed the publication of the guidance. She commented:
“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.”
Research from BITC in 2021 shows that 23% of ethnically diverse people in the UK felt that their ethnic background was seen as an issue when trying to further their careers. To be specific, 32% of respondents answered for Pakistani and 38% for Black African.
What should I be doing as an employer?
As an employer, it is important that you are aware of your legal obligations under the Equality Act 2010.
However, many good employers are going beyond their legal obligations and considering whether to implement ethnicity pay gap reporting and positive action measures because of the benefits that this can bring in terms of an organisation’s culture and performance. This guidance will be welcomed by employers contemplating taking those first steps.
How can we help?
If you are considering implementing ethnicity pay gap reporting, or struggling with existing gender pay gap reporting then we can provide advice and assistance.
If you are contemplating taking positive action then we can advise on the risks of this as well as the potential benefits.
Laura Kearsley is a Partner in our expert Employment Law team.
If you would like any advice concerning the subjects discussed in this article, please contact Laura or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
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