Ethnic Pay Gap Rejection

Ethnic Pay Gap Rejection

Government rejects call for compulsory ethnic pay gap reporting

The Government has rejected the recommendation of an independent review that companies with more than 50 employees should be forced to disclose differences in what they pay to members of different ethnic groups. However, the Government has recommended that companies adopt the review findings.

The review also recommended that companies nominate a board member to oversee progress towards five-year diversity targets.

The review, headed by Baroness McGregor-Smith, former CEO of outsourcing company Mitie, found that those from ethnic minority backgrounds in the UK were more likely to have a degree, but were still more likely to work in low paid and low skill occupations. The employment rate amongst non-white people in the UK is 62.8%, some 12 points lower than for the white population.

Baroness McGregor-Smith claimed that racial discrimination existed at every stage of a person’s working life, and that if those from non-white backgrounds made the same career progress as their white colleagues, it could boost GDP by up to 1.3%, or £24 billion a year.

Baroness McGregor-Smith said:

“The time for talk on race in the workplace is over, it’s time to act. No one should feel unable to reach the top of any organisation because of their race.

“If businesses and the government act on my recommendations, it will show everyone from a minority background that Britain’s workplace is for everyone not just the privileged few.

“The consequences of continuing to do nothing will be damaging to the economy and to the aspirations of so many. So from the Cabinet table to the board rooms, there is no more time for excuses – just change.”

However, in replying on behalf of the Government, Business minister Margot James urged companies to adopt the review recommendations, but stopped short of making them compulsory.

Ms James said:

“Outdated attitudes or lack of awareness about ethnicity in the workplace must be challenged.”

“The economic benefits of harnessing untapped talent is huge and I urge employers to implement these recommendations to ensure everyone can reach the top of their career – whatever their background.”

“We believe … the best method is a business-led, voluntary approach and not legislation as a way of bringing about lasting change.”

Ms James will write to the heads of all FTSE 350 companies urging them to adopt the review’s recommendations, and will chair a new Business Diversity and Inclusion Group.

From April 2017, it will be compulsory for all companies with more than 250 staff to report on the pay gap between their male and female employees.

Search For a Job