MPs urge ministers to introduce mandatory ethnicity pay gap reporting

A cross-party group of British lawmakers have urged the government to make ethnicity pay gap reporting mandatory for large companies, a statement said. 

A new report published on Tuesday (8) by the House of Commons women and equalities committee wants new legislation in this regard.

The report recommended that ethnicity pay gap reporting should be in place by April 2023.

While gender pay gap reporting has been mandatory for companies with over 250 employees since 2017, no such condition exists to monitor pay disparity for workers of different ethnicities.

"The government's failure to move forwards on ethnicity pay gap reporting is perplexing. We already have the systems and structures 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. The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration," said Caroline Nokes MP, chair of the committee.

"The government made bold promises to 'Level Up' geographically. Time and again it proves itself to be blind to the importance of levelling up within our communities and addressing long-standing disparities along the lines of protected characteristics. By taking this small step, the Government would demonstrate its commitment to working with business to reduce inequality."

According to estimates, addressing race inequality in the UK labour market could boost the economy by £24 billion a year.

The Labour Party has welcomed the recommendation and said that the next Labour government will bring in a Race Equality Act to tackle structural racism at source.

"Labour welcomes this recommendation, which echoes the pledge set out in our new deal for working people to make the publication of ethnicity pay gaps mandatory for firms with more than 250 staff, to mirror gender pay gap reporting," said Anneliese Dodds MP, Labour’s shadow women and equalities secretary.

"18 months since the Lawrence Review exposed the deep-seated racial inequalities facing black, Asian and minority ethnic people both in the workplace and across our society. The Conservative government has done nothing but release a report denying structural racism even exists."

The report also wanted legislation to require businesses to publish an accompanying statement and action plan, allowing employers to account for pay gaps and outline steps to be taken to address them.

In 2018, the department for business, energy and industrial strategy launched a consultation. It recognised that 'it is time to move to ethnicity pay gap reporting'. Though the consultation closed in January 2019, the government has yet to publish a response.

Last month, Paul Scully MP wrote to the committee, stating that the Government will respond 'in due course'.