The government has published guidance to help employers who wish to analyse and report on their ethnicity pay. Ethnicity pay reporting is one of the tools employers can use to build transparency and trust among their employees.
The guidance includes advice on:
- collecting ethnicity pay data for employees
- how to consider data issues such as confidentiality, aggregating ethnic groups and the location of employees
- the recommended calculations and step by step instructions on how to do them
- reporting the findings
- further analysis that may be needed to understand the underlying causes of any disparities
- the importance of taking an evidence-based approach towards actions the government has published The UK workforce is becoming increasingly diverse but there is still more to be done to remove barriers to entering the labour market and to ensure pay and progression in the workplace is fair for all ethnic groups.
Data has shown there are wide variations in gross earnings between ethnic groups. Some ethnic minority groups earn less per hour than white British employees on average, while others earn more.
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 disparities exist between different ethnic groups and in turn, gives them an evidence base from which to develop an action plan.
It is already a statutory requirement for employers with at least 250 employees to measure and report gender pay gaps. While ethnicity pay reporting is voluntary, many employers already report on their ethnicity pay data. However, this is the first government guidance which sets out a consistent approach to measuring pay differences.
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