Make ethnicity pay gap reporting mandatory - TUC

The Trades Union Congress (TUC) is calling on the government to tackle racism by making ethnicity pay gap reporting mandatory.

This means companies would have to report on the wage difference between their ethnic and non ethnic staff.

Labour has pledged to bring in mandatory ethnicity pay gap reporting for large companies.

The government has said they do not want to impose burdens on businesses and will not enact mandatory reporting.

An ethnicity pay gap is a measure of the difference between ethnic groups' average earnings regardless of role or seniority.

For example if a higher proportion of black and Asian employees are in the lowest pay bands, and a higher proportion of white British employees are in the highest pay bands, this means the average hourly pay would be different and therefore the employer would have a pay gap.

Currently it is already a statutory requirement for employers with at least 250 employees to measure and report gender pay gaps, however ethnicity pay reporting is voluntary.

TUC General Secretary Paul Nowak said: "Too often BME workers are paid less for doing the same job as their white colleagues.

"Ministers must take bold action to confront inequality and racism in the labour market. The obvious first step is mandatory ethnicity pay gap reporting - not just voluntary guidance.

And alongside publishing the raw data, every employer should have to publish an action plan setting out how they will close their pay gap. That will really drive more equal workplaces."

Most of the minority ethnic groups continue to earn less than White British employees according to the Office for National Statistics.

In 2019, the median hourly pay for those in the white ethnic group was £12.40 per hour compared with those in ethnic minority at £12.11 per hour - a pay gap of 2.3%.

The government has published guidance to help employers measure ethnicity pay gaps in the workforce to promote fairness.

They have also established an Inclusion at Work panel which will develop resources demonstrating to employers how they can use diversity and inclusion measures.

Anneliese Dodds, Labour's shadow women and equalities secretary, said: "On top of the impact of thirteen years of slow growth, the cost of living crisis is hitting many people hard, including many Black, Asian and ethnic minority people.

"Labour will require large companies to report on their ethnicity pay gaps - as they already do with gender pay gaps - as a common sense way to begin the process of tackling these glaring inequalities.

"Labour also has a long-term plan to deliver for all and tackle racial inequality, through our new Race Equality Act."