It is already a statutory requirement for employers with at least 250 employees to measure and report gender pay gaps. The government has decided not to introduce a similar legal requirement for employers to publish their ethnicity pay gaps but it has now published guidance for those wishing to report voluntarily.
Analysing ethnicity pay information is one way employers can identify and investigate disparities in the average pay between ethnic groups in their workforce. It helps employers understand whether unjustifiable differences exist between different ethnic groups and in turn, gives them an evidence base from which to develop an action plan. The government guidance sets out a consistent approach to measuring pay differences.
The guidance for employers provides practical advice on how to measure and report on any ethnicity pay differences within their workforce. Much of the guidance – including the methodology for the calculations – mirrors the approach set out in the guidance for gender pay gap reporting. This should help employers to avoid having to run different processes to collect pay data for both sets of calculations. It should mean that published figures from different businesses can be compared easily.
The guidance also suggests that employers may want to consider publishing an action plan that explains how they intend to address any pay gaps in their ethnicity pay figures. A good action plan should name clear, measurable targets that the employer commits to achieving within a chosen timeframe.
Find out how we can help. Our partner, Jon Dunkley, heads the Wollens specialist Employment Department. Contact him today for an informal chat, without obligation on 01271 342268 or via email at [email protected].
