Lost data means companies can’t report ethnicity pay gap

The CIPD is calling on the Government to make it compulsory for large employers to publish accounts and action campaigns to tackle ethnicity pay inequalities.

These calls were made in response to the Department for Business, Energy & Industrial Strategy’s (BEIS) consultation on ethnicity pay reporting, launched in October 2018, as part of a series of procedures to tackle ethnic disparities

The consultation ran for three months and asked businesses, trade unions, and employer groups to call out the benefits and challenges related to mandatory ethnicity pay reporting. CIPD’s submission to government is backed by evidence gathered from a survey of 250 HR practitioners and findings from member roundtable discussions held in the UK.

Of those surveyed, just over half (53 per cent) reported that they collect some form of ethnicity data in their organization, highlighting one of the most commonly cited hurdles to ethnicity pay.

In order to increase employee ethnicity self-declaration rates, the CIPD said companies should work to produce a culture of trust, build the collection of information into the recruitment process, and explain to their employees effectively how the data will be used.

HR professionals argued that reporting the numbers will not be significant until organisations are prepared to put in place a plan to do something about it and hold themselves to account. 58% of respondents also believe that organisations should be required to produce a narrative and action plan alongside their ethnicity pay information.

However, the government has recently responded to the Business Select Committee’s report on the gender pay gap, outlining that they will not make it compulsory for businesses to produce a narrative or action plan alongside their pay gap report.

They argue that new rules might make the process “too prescriptive” adding “limited value” and that companies genuinely committed to change would produce one anyway.

CIPD senior reward and performance adviser, Charles Cotton, called the government’s response a “missed opportunity” to improve the regulations, but argued that reducing the threshold for reporting should be considered a long-term goal rather than something which can happen immediately.

If ethnicity pay reporting follows the gender pay gap reporting process, the CIPD said we can expect a government consultation on draft regulations and the first reporting deadline in 2021 at the earliest.

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