Three quarters of employers want large firms to disclose ethnicity pay gaps

LaToya Harding
·4-min read
Office workers, ethnic pay gap
The findings showed that 73% of employers supported compulsory disclosure for organisations with more than 250 staff members. Photo: Getty Creative

The majority of employers want large companies to be forced to release data on ethnicity pay gaps, a new report has revealed.

Based on a consultation exercise on ethnicity pay gap reporting, launched by Theresa May in October 2018, the findings showed that 73% of employers supported compulsory disclosure for organisations with more than 250 staff members.

The leaked report, which was seen by the BBC, had 321 responses to the consultation, including 93 private sector employers, 42 from the public sector, and 67 business firms.

Respondents had mixed views on whether reporting should be between white and all black, Asian and ethnic minority staff, or a breakdown of ethnic groups.

Under May’s premiership she pledged to “help employers identify the actions needed to create a fairer and more diverse workforce.”

However, two years later there is still work to be done and Boris Johnson has faced calls to do more.

Earlier this year a petition demanding the introduction of the ethnic pay gap policy received more than 130,000 signatures. This means that the issue should be debated in Parliament.

The Department for Business, Energy and Industrial Strategy said it would respond by the end of the year.

A spokesperson for the department told the broadcaster: "We are working closely with businesses to consider what steps can be taken to build more inclusive workplaces."

READ MORE: UK ethnic pay gap hits lowest since 2012 but still vast in London

Meanwhile, shadow women and equalities secretary Marsha De Cordova said: "Labour has long been calling for the introduction of mandatory ethnicity pay gap reporting.

"The business community and trades unions are all calling for it. It is time the government get on with it as they are the only one behind the curve on this."

Last month former UK prime minister David Cameron also called on the government to make it mandatory for firms to disclose their ethnicity pay gaps.

“If you don’t measure something, you don’t know how you’re doing, and if you don’t know how you’re doing, it’s very difficult to make it better and to fix the problem,” he said during an appearance at the Confederation of British Industry (CBI) conference.

“It is time to say to firms this should be a mandatory requirement, you should report on what you pay.”

Cameron, who left office in 2016, introduced rules making large companies disclose their gender pay gaps annually during his time as prime minister. Since then, the pay gap between men and women has narrowed from 18.2% to 15.5%, according to the Office for National Statistics (ONS), although the gap was already declining and has in fact widened for part-time workers.

READ MORE: Lloyds Bank reveals that Black employees earn 20% less than their colleagues

Data published by the ONS in October showed the UK’s ethnicity pay gap had fallen to 2.3%, its lowest level since 2012. However, the average masks big disparities between different races. Pakistanis and Bangladeshi workers earn about 15% less on average than white British employees, for example.

While the national ethnic pay gap is narrowing, it remains stark in the capital. Non-white workers earn almost a quarter less than white people in London. The ethnic pay gap was 23.8% in London. The smallest gap was in Wales, where it stood at just 1.4%.

The ethnic pay gap is also more pronounced for men than women. White men earned 6.1% more than ethnic minority men on average, while white women earned 2.1% more than ethnic minority women.

Frances O’Grady, general secretary of the Trade Union Congress, said at the time: “Enough is enough. Ministers must take bold action to confront inequality and racism in the labour market. And the obvious first step is to introduce mandatory ethnicity pay gap reporting without delay.

“Greater transparency is needed for firms to confront these pay gaps, and the government can help this happen by extending gender pay gap auditing to include ethnicity too.”

Watch: Ethnic pay gap reporting can unlock real change