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Business Lobby Group Urges Mandatory Ethnic Pay Gap Reporting

Although gender pay gap reporting has been mandatory since 2017, collecting data that shows the pay disparity between ethnicities is not. But that may change now that the Confederation of British Industry (CBI) has made its thoughts on the known issue. The CBI has joined the TUC and the EHRC in urging for data collection around the ethnicity pay gap to become mandatory.

In a letter addressed to the Cabinet Office minister Michael Gove, all three groups agreed that making the reporting mandatory would highlight ongoing pay inequality and prompt employers to change the lack of ethnic minority representation throughout their organisations. The letter asked that “the government make it mandatory for employers to report on their ethnicity pay gaps, building on the successful framework already in place for gender.” It also stated that “Reporting, done well, can provide a real foundation to better understand and address the factors contributing to pay disparities.”

Like Barclays, NatWest, and Lloyds, many businesses have already begun voluntarily reporting their ethnicity pay gaps. The TUC, however, believes that making reporting mandatory is “an obvious first step in helping to improve transparency” and fostering change across the labour market.

The CBI’s chief UK policy director, Matthew Fell, said: “As more companies publish pay gap data alongside clear action plans to tackle disparities, momentum can turn into lasting change.” When businesses better understand the ethnic pay gap, they will hopefully take meaningful steps towards change. Companies will begin to improve how they attract, hire and promote ethnically diverse employees, as well as create inclusive environments where all individuals can progress.

“Everyone deserves the chance to thrive at work and to have a decent, secure job they can build a life on,” TUC general secretary Frances O’Grady said. “But the sad reality is that even today, race still plays a significant role in determining people’s pay and career progression. This problem isn’t going to magic itself away. Without robust and urgent action, many workers will continue to be held back.”

In response to the letter, a spokesperson said: “The Commission on Race and Ethnic Disparities published its independent report earlier this year, which included recommendations on ethnicity pay gap reporting. We are considering the commission’s findings on this matter alongside feedback to our consultation on this issue and other work and will respond to the commission’s report in due course.”


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