Ethnicity Pay Gap: Voluntarily Reporting Halves
According to HR DataHub, who run a database for employers who wish to voluntarily self-report their ethnicity pay gap data, the number of employers who self-reported in 2021 more than halved compared with the year before, falling from 129 in 2020, to just 64 in 2021. It is also down on the pre-pandemic level, which stood at 98 in 2019
Nevertheless, as we highlighted in a previous article we published back in September 2020, the proportion of employers who are now voluntarily calculating their ethnicity pay gap has been on the increase, and had reached 23% by 2020. That is an increase of 18% compared with 2018, when just 5% of employers published their ethnicity pay gap data
The Commission on Race and Ethnic Disparities (CRE) published a report on the 31st March 2021, having been commissioned by the Government on the 16th July 2020 to “examine inequality in the UK, across the whole population.” As part of their investigation, the CRE looked into the issue of ethnicity pay gap reporting. Nonetheless, in their final report, the CRE did not make a recommendation that ethnicity pay gap reporting be made mandatory. On the 17th March 2022, the Government confirmed that it would not be making ethnicity pay gap reporting compulsory.
The view taken by the CRE in their report was that: "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."
However, in a recent report published by the House of Commons Women and Equalities Committee (WEC) on the 8th February 2022, the WEC urged the Government to introduce mandatory ethnicity pay gap reporting.
The chair of the WEC, Caroline Nokes, argued that: "The government’s failure to move forwards on ethnicity pay gap reporting is perplexing. We already have the systems in place to start reporting on the ethnicity pay gap, as well as a clear impetus: tackling inequality benefits not only marginalised groups, but the whole economy."
Noakes added: "The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration."
Older Workers
According to a new report from the Trades Union Congress (TUC), double the number of older workers left the labour market during the Covid-19 pandemic due to ill-health compared with retirement.
As we highlighted in a previous article, one of the reasons for the current labour shortages is that during the pandemic, a larger number of workers in their late 50's and early 60's have decided to retire early, with Neil Carberry pointing out: “The other big trend that we’re seeing is maybe people deciding in later career that now is the time to step away and retire…So we’re seeing quite a few people in their late 50s and 60s say now’s the time to do something different. And that generational change is quite a big theme in what we’re seeing from employers at the moment.“
The TUC in their aforementioned report state: "Analysis...shows that the number of older workers who have left the labour market due to sickness and ill health (97,000) is nearly twice the rate of those who have retired (50,000) during the pandemic. Overall, the number of people aged 50-65 who were not looking for work increased by 200,000 since the pandemic began."
