UK Employment Hub 

As UK companies with more than 250 employees are now required to publish gender pay gap information, the government has turned its attention to the ethnicity pay gap.

On 11 October 2018, the government launched a consultation seeking views on ethnicity pay reporting by employers to inform future government policy. The consultation, which closes on 11 January 2019, asks what ethnicity pay information should be reported by employers to facilitate meaningful action, without unduly burdening businesses.

The consultation focuses on what ethnic pay reporting should look like and how it should be introduced. It outlines different approaches to reporting, ranging from the average hourly earnings of different ethnic groups to reporting ethnicity pay information by pay band or quartile. The government is also seeking views on whether any contextual factors, such as gender or age, should form part of the reported information.

Alongside its consultation, the government has also announced a new “Race at Work Charter”. Employers who adopt the charter (which is voluntary) will commit themselves to a set of principles that aim to improve recruitment and progression for employees from ethnic minority backgrounds.

Although ethnic pay gap reporting is currently not mandatory, employers who want to be seen as serious about diversity and equality may want to consider reporting. Hopefully many will have a positive tale to tell, helping them attract top talent from all ethnic backgrounds; those who find that they do have a material ethnic pay gap will be able to take action to tackle it and report their progress in doing so.

Born out of frustration after years of women in the city earning less than their male counterparts, the UK’s gender pay gap reporting regime has provided a sense of optimism amongst executives. Companies have been seriously concerned with the impact on their reputation. With the transparency of published figures, companies risk facing public backlash. With that in mind, many of the larger banks are beginning to pilot new schemes ranging from encouraging women to take on roles that are more male-dominated to attempting to remove gender bias from the recruitment system by anonymised certain information. Several other companies are aiming to pilot similar schemes focusing at the mid-career level for women and if those schemes prove successful to implement them on a larger scale.

The deadline passed at midnight last night for private businesses with more than 250 employees to publish their gender pay gap report.

More than 10,000 companies have now published their report. Interestingly over 1,100 companies published their report on the day of the deadline, which is more than the total number of companies that reported in the first 326 days of the scheme. Some have argued that such late publishing was, in certain cases, a tactic to bury unflattering results in the last-minute flood of reporting.

From the data published so far we have learned that 78 per cent of companies pay men more than women, 14 per cent pay women more than men and 8 per cent have reported no gender pay gap at all.

Perhaps unsurprisingly, men are paid more than women in every single industry sector, with construction representing the largest gap, followed by finance and insurance.

It is not yet clear what level of punishment those that have failed to publish their pay gap results may face. Though, as we have previously reported on this blog, companies may be named and shamed on a public list on the government portal, and that those that continue to fail to report might ultimately face a summary conviction, be subject to an unlimited fine and be forced to publish the data under a court order.

The People, Reward and Mobility team are pleased to invite you to our annual update seminar. Designed to bring you up to date with the latest key developments affecting your workforce, we will review:

• the top employment cases for 2017 and 2018 and legislative changes, together with their implications for your business;
• key changes in pensions and other employee reward schemes and their effects on your business;
• the latest implications from Brexit on immigration matters, including what you can be doing now to be prepared; and
• diversity and inclusion, with a spotlight on what #MeToo means for your business and gender pay gap reporting, a year into the regime.

The seminar will be preceded by a breakfast buffet and an opportunity to network. We will hold a complimentary legal clinic after the event.

For further information (including dates), please visit our Events page:

Events