Labour force survey data, published by the Office for National Statistics (ONS) in October 2018, indicates that, in general, ethnic minority groups earn less per hour than white employees.
The independent Race in the workplace report, published by Baroness McGregor-Smith in February 2017, indicated that equal participation and progression across ethnicities could be worth an additional £24 billion to the UK’s economy.
As with gender pay gap reporting requirements, it is being suggested by many that organisations publishing data on ethnicity pay will serve to shine a light on the problem and, therefore, influence positive change.
However, shining a light on a problem is often not sufficient.
The Association of Accounting Technicians (AAT) agrees that ethnicity pay reporting could have numerous benefits for employers, employees and the wider economy. However, we also recognise that much more needs to be done to ensure that any new requirements are meaningful and lead to sustainable and positive changes.
The majority (99%) of UK businesses employ less than 250 people, according to Department for Business, Energy and Industrial Strategy (BEIS) statistics published in October 2018. If the government is serious about addressing this problem, it needs to ensure the reporting threshold is much lower than 250.
The AAT Ethnicity Pay Survey 2018, an internal survey of AAT members conducted in October 2018, found that 47% of our members would like reporting requirements to be applied to organisations employing 50 or more employees, and almost one in five (19%) want to go even further, suggesting these reporting requirements should be imposed on businesses employing more than 10 people.
Gender pay gap reporting simply requires employers to report their pay gaps; there is no requirement to produce a plan of action for improvement, although many employers voluntarily do so. This significant issue with gender pay gap reporting must not be repeated in relation to ethnicity pay. Again, this was the overwhelmingly view of AAT members, with more than two-thirds (68%) wanting a legal obligation on organisations to publish an action plan.
Real change is needed, but timidity around reporting requirements is not going to deliver it.
Phil Hall is head of public affairs and public policy at The Association of Accounting Technicians (AAT)
