UK firms may have to reveal ethnicity pay gap

UK firms may be forced to publish data covering their ethnicity pay gap following a consultation launched Th...

Posted: Oct 11, 2018 1:42 PM
Updated: Oct 11, 2018 1:42 PM

UK firms may be forced to publish data covering their ethnicity pay gap following a consultation launched Thursday by Prime Minister Theresa May.

The consultation runs until January 2019 and came in response to figures published by the Race Disparity Audit, which revealed "significant disparities" in the pay of some ethnic minorities compared to their white counterparts, according to a Downing Street statement.

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It comes six months after all UK companies with at least 250 employees published their gender pay gap data after the introduction of a mandatory reporting program.

A small number of UK companies have voluntarily published their ethnicity pay gap data in recent months, including TV production company ITN, which revealed a mean pay gap of 16% and a bonus gap of 66%.

"Too often ethnic minority employees feel they're hitting a brick wall when it comes to career progression," said May in the statement. "Our focus is now on making sure the UK's organisations, boardrooms and senior management teams are truly reflective of the workplaces they manage."

The consultation was launched alongside a "Race at Work Charter," which is intended to increase the recruitment and improve the progression of ethnic minority employees.

UK think tank the Resolution Foundation, which published a study in July showing striking pay disparities between some ethnic minorities and their white counterparts, described the proposals as "important."

The foundation's research revealed that while some progress has been made in educational attainment and employment rates among many ethnic minorities, some significant pay gaps remain.

Black male university graduates earn on average 24% less than their white counterparts, while the pay gap between black and white female graduates is 9%, according to the study. Pakistani or Bangladeshi men and women face even bigger disparities, with a gap of 27% for male graduates and 15% for female graduates.

"Pay auditing has changed the conversation on the gender pay gap, we need to do the same with the ethnicity pay gap," the Resolution Foundation said on Twitter Wednesday.

Omar Khan, director of race equality at think tank Runnymede, also welcomed the initiatives, but said that "greater ambition and investment" would be necessary to fully address racial inequalities in the UK and called for a "fully funded race equality strategy."

Writing on Thursday, Khan expressed concern that the proposals would not mitigate a number of other government policies "that are at present increasing racial inequalities," including the creation of a "hostile environment" for some groups of immigrants, and a policy of austerity that disproportionately affects low-income black and Asian households, according to research by Runnymede.

"A more explicit u-turn on the hostile environment, and a clearer commitment to ending austerity, as well as re-establishing the child poverty target would probably do more to tackle racial inequality than the proposed actions," Khan wrote.

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