Earlier this month the Government published new guidance for employers on ethnicity pay reporting, including how to measure and report on ethnicity, as well as how to address any pay differences within a business.
The guidance has been launched in response to an action identified in Inclusive Britain, which is the Government’s response to a report by the Commission on Race and Ethnic Disparities. It includes advice for employers on several things, including:
- How to collect ethnicity pay data;
- How to carry out the recommended calculations;
- Understanding the data collected; and
- Reporting your findings.
While such reporting is not mandatory for any employers (unlike gender pay reporting which is mandatory for an employer with 250 or more employees), it can be a useful tool to build trust and encourage transparency in a business. The aim of this guidance is to support those businesses which want to report on ethnicity pay by adopting a consistent approach from which to draw comparison. Such transparency through reporting will also likely be attractive to potential future talent considering joining a business.
While there are currently no plans to make ethnicity pay reporting mandatory, the Government’s response to the report by the Commission on Race and Ethnic Disparities did confirm that any business which chooses to publish its ethnicity pay figures will be required to also publish a “diagnosis and action plan”. The intention is that such a plan will provide reasons for pay disparities and what steps will be taken to address them.
If you would like further information, please contact a member of the Employment team at firstname.lastname@example.org.
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