This month, the Government have published guidance on how to measure and report on ethnicity pay differences. Whilst it is not a legal requirement to report on ethnicity pay differences, the Chartered Institute of Personnel and Development (CIPD), which is the professional body for Human Resources and people development recommend employers voluntarily compile ethnicity pay information to assess and address any pay inequalities.
Back in 2018, the Government launched a consultation seeking views on the proposal to make ethnicity pay gap reporting mandatory for employers. Whilst this consultation closed in 2019, the Government requested the Commission on Race and Ethnic Disparities investigate race and ethnic disparities in the UK. This report was published in 2021 and one conclusion was that the mandating of ethnic pay data would not be introduced because of the need to avoid imposing new reporting burdens on businesses at a time when they would be recovering from the COVID-19 pandemic. The recommendation was therefore to only support employers in voluntary reporting.
The new guidance published this month provides helpful information for employers choosing to voluntarily report on their ethnicity pay differences. It includes guidance on how to prepare the payroll data, collecting of the data, and how to conduct your calculations.
There are many benefits for carrying out this activity:
- Analysing pay differences by ethnicity enables the business to focus its attention on equality, diversity and inclusion and take necessary steps to address any inequality.
- It sends a strong message to both current employees and future employees that as an employer, there is a strong commitment to addressing inequalities in the workplace.
- It demonstrates an employer’s commitment to tackling discrimination.
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