The government has issued guidance to support employers to calculate their ethnicity pay gaps (such reporting remains voluntary) and to take meaningful action on the findings.
This follows a commitment made in the government's report 'Inclusive Britain' published in March 2022, which formed a response to a report by the Commission of Race and Ethnic Disparities.
The guidance explains how employees' ethnicity data can be collected, how to make ethnicity pay calculations, analysing and understanding the results of these calculations, and developing an action plan to address any identified disparities. Much of the guidance, including the methodology for the calculations, mirrors the approach set out in the guidance for gender pay gap reporting. However, the guidance points out that ethnicity pay reporting is much more complex than gender pay reporting. While gender pay analysis only involves a comparison between two groups, ethnicity pay analysis can potentially involve many more ethnic groups.
The guidance notes that employers should carefully scrutinise and explore the underlying causes for any pay disparities, and that they shouldn't assume that any disparities are necessarily a result of discrimination. It recommends that, where pay differences arise, further analysis is recommended to help employers understand the real causes and decide whether further action is needed and, if so, to target this more effectively.
The guidance points out that pay disparities may be due to a number of reasons. For instance, lower pay among a particular ethnic group may be because that group disproportionately applies for lower paid, more junior position in an organisation. However, it could be because the company does not provide adequate progression opportunities for people from that ethnic group. It will be up to employers to do further work or collate other available data, such as staff surveys and data on recruitment and progression, to identify and understand the underlying causes.
'Positive action in the workplace: guidance for employers' has also been published. This is intended to help employers understand how they can use the positive action provisions in the Equality Act 2010 appropriately to remove barriers to diversity in their workforce and enable equality of opportunity. It is intended to be read in conjunction with the section on positive action in the workplace contained in the EHRC's Statutory Code of Practice on Employment.
The guidance covers positive action and what it is, how to implement positive action lawfully, the difference between positive action and positive discrimination and how to monitor and review the use of positive action. It contains some practical examples, a number of them taken from the EHRC's Code.
