[UK] Government consultation on the introduction of mandatory ethnicity and disability pay gap reporting

In the UK, the government has launched a consultation on introducing mandatory ethnicity and disability pay gap reporting for certain employers. The consultation will remain open until June 30, Katten reports.

The consultation will apply to ‘large employers’ and ‘large public bodies’, defined as those with 250 or more employees. The responses will be used to inform the government’s drafting of the proposed Equality (Race and Disability) Bill and ensure that the legislation gives employers a clear framework about what is required of them.

Since 2017, large employers have been required to report their gender pay gap data. According to the government, this has led to greater transparency for employers and employees. It plans to use a similar reporting framework for ethnicity and disability pay gap reporting, meaning that all employers with 250 or more employees must report any ethnicity and disability pay gaps within their workforces. 

Employers will reportedly be required to use data from a ‘snapshot date’ of April 5 each year and report their gaps within 12 months, eg, by April 4 the following year. Data will be reported online, in a similar way to how gender pay gaps are reported. The Equality and Human Rights Commission, which currently enforces gender pay gap reporting, will also be empowered to enforce ethnicity and disability pay gap reporting. 

Ethnicity and disability pay gaps will be reported with the same measures used for gender pay gap reporting:

• mean differences in average hourly pay;

• median differences in average hourly pay;

• pay quarters – the percentage of employees in four equally-sized groups, ranked from highest to lowest hourly pay;

• mean differences in bonus pay;

• median differences in bonus pay; and

• the percentage of employees receiving bonus pay.

The Government will also require employers to report on the overall breakdown of their workforce by ethnicity and disability, together with the percentage of employees who did not disclose data on their ethnicity and disability.

In addition to the above, the Government is reportedly seeking views on whether employers should have to produce “action plans” for ethnicity and disability pay gaps. A similar proposal for gender pay gap “action plans” is included in the Employment Rights Bill. Employers would have an opportunity to explain the reasons for any pay gaps and the steps they are taking to address them. 

Source: Katten

In the UK, the government has launched a consultation on introducing mandatory ethnicity and disability pay gap reporting for certain employers. The consultation will remain open until June 30, Katten reports.

The consultation will apply to ‘large employers’ and ‘large public bodies’, defined as those with 250 or more employees. The responses will be used to inform the government’s drafting of the proposed Equality (Race and Disability) Bill and ensure that the legislation gives employers a clear framework about what is required of them.

Since 2017, large employers have been required to report their gender pay gap data. According to the government, this has led to greater transparency for employers and employees. It plans to use a similar reporting framework for ethnicity and disability pay gap reporting, meaning that all employers with 250 or more employees must report any ethnicity and disability pay gaps within their workforces. 

Employers will reportedly be required to use data from a ‘snapshot date’ of April 5 each year and report their gaps within 12 months, eg, by April 4 the following year. Data will be reported online, in a similar way to how gender pay gaps are reported. The Equality and Human Rights Commission, which currently enforces gender pay gap reporting, will also be empowered to enforce ethnicity and disability pay gap reporting. 

Ethnicity and disability pay gaps will be reported with the same measures used for gender pay gap reporting:

• mean differences in average hourly pay;

• median differences in average hourly pay;

• pay quarters – the percentage of employees in four equally-sized groups, ranked from highest to lowest hourly pay;

• mean differences in bonus pay;

• median differences in bonus pay; and

• the percentage of employees receiving bonus pay.

The Government will also require employers to report on the overall breakdown of their workforce by ethnicity and disability, together with the percentage of employees who did not disclose data on their ethnicity and disability.

In addition to the above, the Government is reportedly seeking views on whether employers should have to produce “action plans” for ethnicity and disability pay gaps. A similar proposal for gender pay gap “action plans” is included in the Employment Rights Bill. Employers would have an opportunity to explain the reasons for any pay gaps and the steps they are taking to address them. 

Source: Katten