UK government proposals to require employers to report their ethnic minority pay gap statistics in future could lead to ‘exponential’ growth in legal action by members of minority groups, a lawyer has warned.
Announcing the launch of a consultation on whether mandatory reporting could help address disparities between the pay and career prospects of black, Asian and minority ethnic (BAME) workers and their white colleagues, Prime Minister Theresa May said: "Every employee deserves the opportunity to progress and fulfil their potential in their chosen field, regardless of which background they are from. But too often ethnic minority employees feel they're hitting a brick wall when it comes to career progression."
The consultation, which runs until January 2019, asks firms with more than 250 employees to share their views on what information should be published “to allow for decisive action to be taken” while avoiding “undue burdens” on business.
But Nikita Sonecha, employment solicitor at SA Law, warned that race discrimination claims could “increase exponentially” if such legislation were passed as it would become “easier for individuals to bring such claims, and such data may be key to backing up their claims”.
Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD), also told People Management: "It is crucial that the insights and views of employers are fully taken into account during the consultation for any new law in this area to truly create more inclusive workplaces. There are many challenges and complexities to consider when collecting, analysing and reporting data on ethnicity, so there will be a need to provide in-depth information, advice and guidance for employers."
The move to report on ethnic pay follows a government decision to require firms with more than 250 employees to reveal their gender pay gaps. But race-based pay is a far more complex area, given the greater intersectionality between different ethnicities, and the fact that businesses are not currently required to collect information on their employees’ ethnic backgrounds.
The Prime Minister is also due to unveil a Race at Work Charter aimed at increasing recruitment and career progression among BAME employees, according to HR Magazine. The Charter, which was developed in conjunction with charity Business in the Community, has been signed by the CIPD, accountancy giant KPMG and public sector bodies including NHS England and the Civil Service.
May’s announcement follows the launch of a review by the Department for Business, Energy and Industrial Strategy earlier this year to scrutinise how employers have tackled barriers to BAME employee progression at work, a year after the 2017 McGregor-Smith Review into race in the workplace. The Review found that the UK economy could potentially benefit from a £24 billion (US$27.4 billion) annual economic boost if BAME employees were given the same opportunities as their white counterparts.
But an Equality and Human Rights Commission report indicated that most employers would struggle to collect data to calculate their ethnicity pay gap should it become a legal requirement. More than half believed they would hit obstacles when trying to collect such data, while a third felt it was 'too intrusive'. A quarter thought employees would not want to share this kind of information.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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UK government proposals to require employers to report their ethnic minority pay gap statistics in future could lead to ‘exponential’ growth in legal action by members of minority groups, a lawyer has warned.
Announcing the launch of a consultation on whether mandatory reporting could help address disparities between the pay and career prospects of black, Asian and minority ethnic (BAME) workers and their white colleagues, Prime Minister Theresa May said: "Every employee deserves the opportunity to progress and fulfil their potential in their chosen field, regardless of which background they are from. But too often ethnic minority employees feel they're hitting a brick wall when it comes to career progression."
The consultation, which runs until January 2019, asks firms with more than 250 employees to share their views on what information should be published “to allow for decisive action to be taken” while avoiding “undue burdens” on business.
But Nikita Sonecha, employment solicitor at SA Law, warned that race discrimination claims could “increase exponentially” if such legislation were passed as it would become “easier for individuals to bring such claims, and such data may be key to backing up their claims”.
Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD), also told People Management: "It is crucial that the insights and views of employers are fully taken into account during the consultation for any new law in this area to truly create more inclusive workplaces. There are many challenges and complexities to consider when collecting, analysing and reporting data on ethnicity, so there will be a need to provide in-depth information, advice and guidance for employers."
The move to report on ethnic pay follows a government decision to require firms with more than 250 employees to reveal their gender pay gaps. But race-based pay is a far more complex area, given the greater intersectionality between different ethnicities, and the fact that businesses are not currently required to collect information on their employees’ ethnic backgrounds.
The Prime Minister is also due to unveil a Race at Work Charter aimed at increasing recruitment and career progression among BAME employees, according to HR Magazine. The Charter, which was developed in conjunction with charity Business in the Community, has been signed by the CIPD, accountancy giant KPMG and public sector bodies including NHS England and the Civil Service.
May’s announcement follows the launch of a review by the Department for Business, Energy and Industrial Strategy earlier this year to scrutinise how employers have tackled barriers to BAME employee progression at work, a year after the 2017 McGregor-Smith Review into race in the workplace. The Review found that the UK economy could potentially benefit from a £24 billion (US$27.4 billion) annual economic boost if BAME employees were given the same opportunities as their white counterparts.
But an Equality and Human Rights Commission report indicated that most employers would struggle to collect data to calculate their ethnicity pay gap should it become a legal requirement. More than half believed they would hit obstacles when trying to collect such data, while a third felt it was 'too intrusive'. A quarter thought employees would not want to share this kind of information.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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