Government publishes voluntary guidance on ethnicity pay gap reporting

The Government has published voluntary guidelines for employers wishing to monitor for any ethnicity pay gaps.

A black woman speaking at a work meeting


The Government has published voluntary guidance to help employers who wish to analyse and report on their ethnicity pay gap.

It says this is in response to a recommendation in the Inclusive Britain report, the Government’s response to the report by the Commission on Race and Ethnic Disparities. However, campaign groups say that the response doesn’t go far enough and that publishing should be mandatory and backed by action plans on how to address any gaps.

The Government has been resistant to extending mandatory gender pay gap reporting to ethnicity-related data, arguing that it is too complicated to ensure consistency in the reporting process and that people may not want to divulge details about their ethnicity. Campaigners argue that reporting is vital to shine a light on structural racism and to address intersectional issues which mean, for instance, that women from some minority groups fare much worse in terms of career progression than white women.

The new guidance on ethnicity pay reporting is described as “one of the tools employers can use to build transparency and trust among their employees”. The Government says: “We want to help those employers who want to report their ethnicity pay data by providing a consistent approach that they can follow, which will allow for meaningful comparisons.”

The guidance includes advice on everything from collecting ethnicity pay data and how to consider data issues such as confidentiality, aggregating ethnic groups and the location of employees to how to calculate gaps and report findings as well as information on what further analysis may be needed to understand the underlying causes of any disparities.

TUC General Secretary Paul Nowak said:   “The harsh reality is that even today, structural racism plays a big role in determining Black workers’ pay and career prospects. Too often BME workers are paid less for doing the same job as their white colleagues.

“Ministers must take bold action to confront inequality and racism in the labour market. The obvious first step is mandatory ethnicity pay gap reporting – not just voluntary guidance.  And alongside publishing the raw data, every employer should have to publish an action plan setting out how they will close their pay gap. That will really drive more equal workplaces.

“Business and unions are united in their support for compulsory pay gap monitoring. Ministers must bring it in without delay.”

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