Government may force firms to reveal ethnicity pay gap to boost minority workers

Businesses could be forced to reveal their ethnicity pay gap under plans unveiled by the Prime Minister to help ethnic minority employees at work.

A consultation on mandatory pay reporting is among a raft of measures announced by Theresa May, who acknowledged minorities often “feel like they are hitting a brick wall” at work.

The move follows a Race Disparity Audit last year which revealed significant disparities in pay and promotion opportunities of different groups and the gender pay gap figures which showed wide discrepancies between men and women in some firms were published earlier in 2018.

Number 10 said that despite the audit, the number of firms publishing data on ethnicity and pay voluntarily “remains low”.

The consultation will run until January to allow businesses to share views on what information should be published “to allow for decisive action to be taken”, it added, while at the same time avoiding “undue burdens on businesses”.

Mrs May also unveiled a Race at Work Charter, signed by firms including accountancy giant KPMG, advertising firm Saatchi & Saatchi, and public sector bodies including NHS England and the Civil Service.

The charter, designed with Business in the Community (BITC), commits signatories to increasing recruitment and career progression of ethnic minority employees.

The leaders of public services including the NHS, armed forces, schools and the police are also to reveal plans to increase ethnic minority staff in senior roles, the Government said.

Mrs May said: “Every employee deserves the opportunity to progress and fulfil their potential in their chosen field, regardless of which background they are from, but too often ethnic minority employees feel they’re hitting a brick wall when it comes to career progression.

“That’s why I’m delighted to launch the Race at Work Charter, which gives businesses a clear set of actions to work towards in helping to create greater opportunities for ethnic minority employees at work.

“One year on from publishing the Race Disparity Audit, the Government is delivering on its promise to explain or change ethnic disparities in all areas of society, taking action to support young people into work with funding of £90 million from dormant bank accounts, and acting on the recommendations of the Lammy review, including by increasing diversity within prison officer recruitment.

“Our focus is now on making sure the UK’s organisations, boardrooms and senior management teams are truly reflective of the workplaces they manage, and the measures we are taking today will help employers identify the actions needed to create a fairer and more diverse workforce.”

The report published by the Government showed widely varying outcomes in areas including education, employment, health and criminal justice between Britain’s white and ethnic minority populations.

Among them was that Asian, black and other ethnic groups were disproportionately likely to be on a low income, with just 1% of non-white police officers in senior roles.

Within NHS England, it found that 18% of white job applicants shortlisted got the job, compared with 11% of ethnic minorities.

Matthew Fell, chief UK policy director at the CBI, said: “Transparency can be a catalyst for action in tackling the ethnicity pay gap, in the same way that it has been so successful for gender.

“Reporting must be done in a way that is supported by both businesses and employees, to recognise the wide range of ethnic groups and legitimate staff concerns about intrusiveness where sample sizes are small.

“Companies want to work with the Government to achieve their goal of becoming more inclusive employers.”

The move was welcomed by Maria Miller, chairwoman of the Commons’ Women and Equalities Committee, who said: “This progress by Government is encouraging and we are heartened to see that the Government is taking race inequality seriously.

“By requiring employers to take responsibility for the diversity of their workforces, the Government can ensure that people from ethnic minorities are not left behind in their careers.

“We look forward to seeing the details of these proposals and what further action the Government takes to tackle these injustices in the future.”

The Equality and Human Rights Commission also supported it, with its chairman David Isaac saying: “Extending mandatory reporting beyond gender will raise transparency about other inequalities in the workplace and give employers the insight they need to identify and remove barriers to ethnic minority staff joining and progressing to the highest level in their organisations.”