The Commission on Race and Ethnic Disparities (CRE) was commissioned by the Government on the 16th July 2020, to "examine inequality in the UK, across the whole population." It published its report on the 31st March 2021. Whilst it did not call for the introduction of mandatory ethnicity pay gap reporting, it did issue guidance for those who wish to volunatrily publish their own ethnicity pay gaps.
Ethnicity Pay Gap Reporting
Back on the 18th October 2018, the Government launched a consultation into whether mandatory ethnicity pay gap reporting should be introduced. That consultation closed on the 11th January 2019, but as of yet, the Government has not provided any formal response to the consultation.
Nevertheless, following the Black Lives Matter protests in the wake of the death of George Floyd, on the 16th July 2020, the Government set up the CRE to "examine inequality in the UK, across the whole population.". The Commision was chaired by Tony Sewell.
In its report, published on the 31st March 2021, the CRE did not make a recommendation for mandatory ethnicity pay gap reporting. Instead, the report stated: "It is clear that pay gap reporting as it is currently devised for gender cannot be applied to ethnicity. There are significant statistical and data issues that would arise as a result of substituting a binary protected characteristic (male or female) with a characteristic that has multiple categories.”
The CRE added: "The main statistical problem that arises with ethnicity pay reporting is the unreliability of sample sizes. If an employer with 250 employees (the threshold suggested in the 2018 BEIS consultation on ethnic pay gap reporting) reports a gender pay gap, on average they will be comparing 125 men with 125 women. If they report an ethnicity pay gap as well, on average they will be comparing 225 White employees with 25 ethnic minority employees. Any findings from such a comparison will be unreliable and make it impossible to look at the workforce stratified by the 18 ONS ethnicity classifications."
Furthermore, the CRE argued that: "If an employer is in an area with a low ethnic minority population there may not be a diverse local candidate pool for firms to employ from. The 2011 Census data shows that of the 650 constituencies in the UK, 437 are over 90% White, so many employers around the country simply do not have enough ethnic minorities for the recording sample to be valid."
Another problem relates to the issue as to how employers would go about dealing with and incorporating data from those employees who fail to and/or refuse to declare what their ethnicity is.
Nonetheless, the report did encourage those who already publish their ethnicity pay gap data voluntarily, to continue to do so, and recommended that the Government produce guidance for those who do voluntarily wish to publish their data.
Moreover, recommendation 9 of the report states: "The Commission recommends that all employers that choose [voluntarily] to publish their ethnicity pay figures should also publish a diagnosis and action plan to lay out the reasons for and the strategy to improve any disparities. Reported ethnicity pay data should also be disaggregated by different ethnicities to provide the best information possible to facilitate change. Account should also be taken of small sample sizes in particular regions and smaller organisations."
Neverthless, the report failed to identify any potential solutions as to how the Government should go about overcoming the obstacles that the CRE identified, in terms of introducing mandatory ethnicity pay gap reporting.
Petition Calling For The Introduction of Mandatory Ethnicity Pay Gap Reporting
In response to the Government's failure to respond to its own consultation on mandatory ethnicity pay gap reporting, a petition was launched calling for mandatory ethnicity pay gap reporting to be introduced. By the time the petition closed in September 2020, it had garnered 130,567 signatures, passing its target of 100,000 signarities required to prompt a debate on the issue in parliament.
In its response to the petition, the Government stated: "The Government ran a consultation from October 2018 to January 2019 on the introduction of mandatory Ethnicity Pay Reporting. We are currently analysing these and will respond by the end of the year.” That deadline to respond by the end of the year has long since passed, and to date, there has still been no formal response from the Government whatsoever.
Analysing The Data
Whilst some of those organisations who do voluntarily publish their ethnicity pay gap data do so by comparing the pay gap between white employees, and all ethnic minority staff as a whole, the CRE in their report recommend that the data should be "disaggregated by different ethnicities to provide the best information possible to facilitate change."
The Office for National Statistics (ONS) use 18 different classifications. Nevertheless, even those organisations who do voluntarily report their ethnicity pay gap data, are not yet providing that level of disaggragation. That is one of reasons why the CRE have called for Government guidance on voluntary ethnicity pay gap reporting, but as of yet, 3 months after publication of the CRE report, no such guidance has yet been forthcoming.
