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Government to propose mandatory ethnic pay gap reporting

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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.