Following the publication of two reports highlighting the barriers facing minority ethnic communities in the workplace, the government has issued a consultation on mandatory ethnicity pay gap reporting for employers.

The consultation asks for views on a number of questions, including what information should be published (for instance whether it should be one pay gap figure; different figures by ethnicity group; by pay band or quartile), what contextual information should be reported (for instance, variations by geography, age, gender); whether employers should also have to publish narrative and action plans alongside the data; and how to classify ethnicity data.

Finally the consultation asks which employers should have to report ethnicity pay information – all employers, those with 50 or more employees, those with 250 or more, those with 500 or more or another threshold entirely.

The drivers behind the consultation stem from findings that people from ethnic minorities are more likely to work in low-skilled, low-paid jobs. This is particularly true for people from Pakistani and Bangladeshi backgrounds, with more than two in five workers in the three lowest-skilled occupation groups. Black workers are also more likely to work in caring, leisure and other service occupations than any other ethnic group.

Once in work, evidence then shows that people from ethnic minorities progress less far and earn less money than their white counterparts. For instance, over 12 per cent of the working age population were from ethnic minority backgrounds, but made up only 10 per cent of the workforce and held only 6 per cent of top management positions.

The consultation emerged from a report commissioned by the government in 2016 by Baroness McGregor-Smith to examine the barriers faced by people from ethnic minorities in the workplace and consider what could be done to address them. Her 2017 report Race in the Workplace set out a range of actions for business and the government to take forward to help improve employment and career prospects for those from ethnic minority backgrounds.

In order to monitor progress, the government commissioned a One Year On Review of the McGregor-Smith Report in February 2018. The findings showed limited progress by employers. For instance, just 11 per cent of employees reported that their organisations collected data on ethnicity pay. Only eight per cent of small organisations were likely to report that they collected data on ethnicity pay.

Emma Game of Thompsons Solicitors commented: “Obtaining this data is an important way of addressing equality in the workplace and ensuring fairness to all. The statistics received to date are disappointing and show that more work needs to be done to tackle this. This may very well be by way of mandatory reporting, which we at Thompsons would welcome. As stated in the consultation report, “there is no reason why the workforce in all organisations should not reflect the diversity of the communities in which their employer operates.” 

To reply to the consultation, go to the government website.