Kate Palmer: Should Ethnicity Pay Gap Reporting be introduced?

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The Liberal Democrats have called on employers to report on their ethnicity pay gap announcing that they want to hold the government to account on their inaction.

Under the Equality Act 2010, the requirement for larger companies to calculate and publish their gender pay gap was introduced in April 2017. Employers with 250 or more employees have until the 4th April 2018 to publish the report, along with any detailed extra information, on their company website and upload the information to a government website. Some employers have already taken this step and the details of their gender pay gap are already live to view by the public.

Lib Dem Leader Tim Farron has called for the requirement to be extended to allow ethnic diversity in the workforce to be monitored more accurately. Farron is suggesting that companies with more than 250 staff should monitor and publish details of employment and pay differences focusing not just on gender but on ethnic minority status, as well as publishing LGBT levels.

Publicly reporting on whether an ethnicity pay gap exists in a business throws light on working practices and whether these are adversely affecting people from ethnic minorities. Whilst its unknown if there would be any legal force behind the requirement, encouraging analysis, communication and deliberation around the issue is often the first step to addressing inequality at work. Continuing with the current transparency trend and requiring employers to publicly announce any ethnic pay gap will allow employers to address any pay gaps based on ethnicity, if there are any. It also creates a reputational pressure on businesses who want to be viewed, internally and externally, as diverse and one open to creating equal opportunities.

A report providing evidence that there are pay differentials between ethnic minorities could be used to bring a tribunal claim on the grounds that an individual is being treated less favourably because of their race. However, a report conducted by Parliament found that ending ethnic minority inequality at work would boost the British economy by £24bn a year; any negative repercussions from an ethnicity pay gap report may be a small price to pay to gain equality.

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About Kate Palmer

Kate Palmer CIPD BA (Hons) is the Head of Advisory at Peninsula and a member of our senior leadership team.

With a specialist background in facilities management in the NHS (public and private sectors), Kate offers a wealth of employment law experience. She’s an expert negotiator; one notable case was with the NHS’s trade unions over terms and conditions in the Agenda for Change pay system.

Kate brings a drive and a passion for constant improvement to Peninsula; from the service to herself and the team. It’s a big part of what shaped the business into the centre of excellence it is today.

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