Following the announcement last October that the Government had launched a consultation into whether ethnicity pay gap reporting should be introduced, a new study by the Resolution Foundation has found that black, Asian, and minority ethnic (BAME) workers are paid a total of £3.2 billion per annum less than their white colleagues.
Ethnicity Pay Gap Reporting
Back on the 11th October 2018, the Government launched the consultation into whether to introduce ethnicity pay gap reporting. Submissions to the consultation closed on 11th January 2019. This announcement followed a review by Baroness McGregor-Smith published back in February 2017, which recommended that employers with 50 or more employees be required to publish ethnic pay gap data. However, the Government's preferred threshold is employers with 250 or more employees. In the consultation document, the Government stated: "The government believes that employers of fewer than 250 people should not be expected to publish ethnicity pay data. Although Baroness McGregor-Smith originally recommended a threshold of 50 employees, our judgement is that this risks imposing too great a burden on business. A threshold of over 250 employees would mirror the gender pay gap reporting methodology." The Government's response to the consultation is expected in the next few months.
The Resolution Foundation Report
The findings of the Resolution Foundation report highlight that the ethnicity pay gap is considerable. As well as the main finding that BAME workers are being £3.2 billion per annum less than their white colleagues, the report also found that:-
- There is an ethnicity pay gap of 17% for black male graduates, which equates to £3.90 per hour
- Amongst black female graduates, the ethnicity pay gap is 9%, which amounts to £1.62 per hour
- The gap for Pakistani and Bangladeshi male graduates is 12%, which equates to £2.67 per hour. Amongst male non-graduates, the gap rises to 14%
- The ethnicity pay gap amongst no0n-graduates was generally less
The Resolution Foundation state in their report that the ethnicity pay gap is "a huge blow to the living standards of those affected." Kathleen Henehan, a research and policy analyst at the Resolution Foundation, added: "Black, Asian and minority ethnic (BAME) workers have made important gains in the labour market in recent years. A record number of young BAME workers have degrees, and a record number are in work. However, despite this welcome progress, many of Britain’s 1.6 million black, Asian and ethnic minority workers face significant disadvantages in the workplace. Black and ethnic minority workers still suffer significant pay penalties compared to white men and women doing the same types of jobs, and are collectively losing out on £3.2bn a year. After the successful steps taken to expose and tackle the gender pay gap in 2018, we now need greater accountability on the ethnic pay gap in 2019. The government can make this happen by requiring large firms to report their BAME pay gaps alongside the reporting they’re already doing on gender. The results should give firms an extra incentive to tackle these issues."
The Government responded by stating that "Diversity is good for businesses and this government is committed to ensuring the workplace works for everyone. We’ve introduced new laws to help companies ensure the make-up of their boards and senior management is representative of their workforces and we’re currently consulting on proposals for mandatory ethnicity pay reporting as part of a series of measures to help employers tackle ethnic disparities in the workplace."
