No mandatory ethnicity pay gap reporting in the United Kingdom

According to recent data, the number of employers in the United Kingdom who voluntarily disclose ethnicity pay gap data has dropped dramatically, bolstering arguments for a forced method similar to that used for gender pay data. The UK government had a consultation on this in 2018, and the House of Commons Women and Equalities Committee recently recommended that big companies reveal ethnicity pay gaps starting in April 2023. Despite the fact that no formal response to the consultation has yet been issued, it appears that the demand was ignored.

On March 17, the government released its response to Dr. Tony Sewell’s Commission on Race and Ethnic Disparities’ far broader findings. A vow to support companies with voluntary reporting by providing updated guidance in the summer of 2022 is among a slew of other steps. The government will not enact obligatory reporting legislation “at this stage,” according to the answer, because it wants to “avoid imposing new reporting burdens on businesses as they recover from the pandemic.” Similarly, the long-awaited Employment Bill has been postponed due to the epidemic, this time to allow the government to “more firmly establish” the “post-pandemic needs of businesses and workers.”

Employee confidentiality, ethnic classifications, and reporting across demographically distinct locations will all be addressed in the ethnicity pay gap reporting guidance. Employers should be encouraged to use specific ethnic groupings rather than generic categories where possible. Case studies from top businesses will be included in the advice, which will serve as a benchmark for successful action plans. If the voluntary approach fails, the government expects companies to  “take meaningful action to identify and then tackle the causes of disparate pay” once the guidelines has provided them with “a trustworthy, consistent standard for reporting.”