There have been calls in the past for the government to make ethnicity pay reporting mandatory for organisations with more than 250 employees. In line with gender pay reporting.

Gender pay gap reporting became mandatory for UK companies with over 250 employees in 2017. But for ethnicity pay it is voluntary. The UK workforce is becoming increasingly diverse. However, there are still significant differences in ethnicity pay at all levels. The guidance advocates transparency in pay.

Reporting on ethnicity pay will help remove some of the barriers that employees from ethnic minority groups face in the workplace. These include recruitment, promotion, career progression and access to mentoring and support.

Guidance for employers

The government published its first Guidance for employers on Monday 17 April 2023 to help employers with ethnicity pay reporting. There is still more to be done to improve the narrowing of the gap.

The guide is to help employers wishing to analyse and report on their ethnicity pay. It guides how to measure, report on and address any ethnicity pay differences within their workforce.

The guidance aims to develop a consistent, methodological approach to ethnicity pay reporting. As well as guiding how employers can report on their ethnicity pay, it also includes advice on how to:

• collect ethnicity pay data for employees
• consider data issues such as confidentiality, aggregating ethnic groups and the location of employees
• make ethnicity pay calculations
• develop an action plan to address any identified disparities

Much of the guidance mirrors the approach set out in the guidance for gender pay gap reporting.

Closing ethnicity pay gap is beneficial to organisations and helps improve profitability and productivity of organisations. In today’s competitive labour market, employers seeking to gain a competitive edge must take positive steps to close the ethnicity pay gap and be more transparent about pay.

If you are considering implementing ethnicity pay reporting in your workplace and are seeking assistance, we can help you source an HRi accredited HR consultant to work with your business.