Ethnicity pay gap reporting scrutinised

Government urged to go further on ethnicity pay reporting

The Government has been urged by AAT (the Association of Accounting Technicians) to go further with its plans for Ethnicity Pay Reporting by making the reporting threshold lower, and introducing a legal obligation on companies to publish action plans detailing how they will do more within their organisations. 

The Government is currently consulting on plans to make Ethnicity Pay reporting compulsory, and AAT has surveyed its members to establish their views on the subject. The professional accountancy body has over 140,000 members, 13 per cent of which identify as BAME (Black & Minority Ethnic), while almost 30 per cent of AAT’s 250+ employees identify as BAME.

The AAT Ethnicity Pay Survey 2018 revealed that only two per cent of respondents believe financial benefits would be a key benefit of Ethnicity Pay reporting. However, 10 per cent believe it will improve company performance and 50 per cent believe the key benefit is improving social justice. 21 per cent think that all three of these benefits will be realised by Ethnicity Pay Reporting.

Phil Hall, AAT Head of Public Affairs & Public Policy, said,

Ethnicity pay reporting could have numerous benefits for employers, employees and the wider economy, as demonstrated by the views of our members. That said, we also recognise that more needs to be done to ensure these requirements are meaningful and lead to sustainable and positive changes.

Kelly Tolhurst MP, Minister for Small Business, Consumers & Corporate Responsibility, who launched the ethnicity pay consultation said,

Transparency is a vital first step towards harnessing the power of a diverse workforce. We have seen the power of transparency in Gender Pay Gap reporting. Reporting Ethnicity Pay information enables employers to identify – and then tackle – barriers to creating a truly diverse workforce. If there is a consistent approach to reporting, they can also benchmark and measure their progress by comparing themselves to other employers and learn from them.

Findings from the AAT Ethnicity Pay Survey 2018 also show a very clear majority favour a reporting threshold well below the 250+ employees cut-off point currently in place for Gender Pay Gap reporting. Gender Pay Gap reporting simply requires companies to report their pay gaps, there is no requirement to do anything about them – there isn’t even an obligation to produce an action plan,

The AAT Ethnicity Pay Survey 2018 demonstrated overwhelming support for such action, with more than two thirds (68 per cent) supporting the introduction of a legal obligation on companies to publish an action plan.

 

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