Blair Adams: Is the UK a step closer to ethnicity pay gap reporting?


The government consultation on ethnicity pay gap reporting by organisations with 250 or more employees closed in January 2019, and no outcomes or conclusions have yet been published.

However, the Office of National Statistics (ONS) published its first report on ethnicity pay gaps, Ethnicity pay gaps in Great Britain 2018, on 9 July 2019, making the introduction of ethnicity pay gap reporting by employers more likely.

The ONS report shows pay gaps between ethnic groups for the period 2012 to 2018; Chinese and Indian employees consistently earned the most, followed by white British employees, with employees of Bangladeshi origin earning the least.

The report expresses the difference in average hourly earnings between white British and other groups as a proportion of white British earnings. This produces a positive or negative percentage figure, just as in gender pay gap reporting. Employers are already providing much of the pay data used via the Annual survey of hours and earnings report, also published by the ONS.

The ONS ethnicity pay gap report report used various approaches, comparing, two, five and 10 different ethnic categories, suggesting that useful results can be generated even if the raw data on ethnicity is basic because it is recorded in a binary way, for example white or non-white.

The conclusion that government may draw from the ONS report is that ethnicity pay gap reporting by employers is both feasible and desirable.

So, what steps can employers take now? Organisations can compare their ethnicity data categories to the standard ONS categories and consider how to resolve any differences, or, if employers do not currently collect ethnicity data or if their data is poor quality, they could think on how to establish or improve their baseline position, for example by encouraging or incentivising employees to respond to surveys. Finally, employers can consider whether their HR and payroll systems will allow them to extract pay statistics by ethnic group.

Blair Adams is a partner in the employment team at Winckworth Sherwood