Business, unions and EHRC press government on ethnic pay gap reporting

The UK’s largest business lobby group has joined the Trades Union Congress (TUC) and the human rights watchdog in calling for mandatory ethnicity pay gap reporting, saying data collection will help tackle racial inequalities at work.

In a letter to the Cabinet Office minister Michael Gove, the Confederation of British Industry (CBI), TUC and Equality and Human Rights Commission, said the move would help draw attention to pay disparities and a lack of minority representation across senior positions, and hopefully spark action by employers.

It would follow in the footsteps of gender pay gap reporting, which has been a legal requirement for businesses with more than 250 employees since 2017. The data has highlighted the relatively small number of women making it to high-paid senior positions across UK firms, and in some cases has revealed that women have been paid less than men in similar positions.

“We’re asking the government to make it mandatory for employers to report on their ethnicity pay gaps, building on the successful framework already in place for gender,” the letter said. “Reporting, done well, can provide a real foundation to better understand and address the factors contributing to pay disparities.”

Some businesses – including banks such as Barclays, NatWest and Lloyds – have already begun voluntarily reporting their ethnicity pay gaps. However, the TUC said making it mandatory was “an obvious first step in helping to improve transparency” and bringing about widespread change across the labour market.

“As more companies publish pay gap data alongside clear action plans to tackle disparities, momentum can turn into lasting change,” Matthew Fell, the CBI’s chief UK policy director, said. “Businesses better understand the concerted and meaningful action they need to take – improving how they attract, hire and promote ethnically diverse employees all the way to the boardroom, to creating inclusive workplaces where talented individuals can progress.”

The joint letter urges ministers to set a clear timetable for bringing pay reporting into law.

“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,” O’Grady added.

A government 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.”