The Government consulted on proposals for mandatory ethnicity and disability pay gap reporting for large employers, which are summarised below.
The LGA submitted a response to the consultation on behalf of the local government sector, and a copy of that response is available by emailing [email protected]
A summary of the proposals
Since 2017, employers in the UK with over 250 staff have been required to report their gender pay gap data. The Government is extending this to include ethnicity and disability and proposes to align these new pay gap reporting requirements with the provisions already in place for gender pay gap reporting.
These new duties will form part of the Equality (Race and Disability) Bill.
The headline proposals (with links to the relevant part of the consultation document) are:
- The requirements for ethnicity and disability pay gap reporting will align with the provisions already in place for gender pay gap reporting in terms of:
- applying only to large employers with 250 or more employees
- the annual reporting dates; and
- what pay gap information has to be reported, for example, differences in hourly rates of pay between the relevant groups.
- Employers will have to report the overall breakdown of their workforce by ethnicity and disability, and the percentage of employees who did not disclose their ethnicity or disability category.
- Public sector bodies (including local authorities) will, in addition, have to report ethnicity and disability pay differences by grade/salary bands data relating to recruitment, retention and progression by ethnicity and disability.
- In relation to ethnicity data the proposal is to use the Government Statistical Service (GSS) 'ethnicity harmonised standard' categories (which is the same as that used in the 2021 census).
- In order to allow for protection of individuals' identities, the proposal is that ethnic groups for pay reporting should be a minimum of 10 employees, aggregating groups where necessary in line with Office for National Statistics (ONS) guidance.
- As a minimum, employers will be required to report on a ‘binary’ basis between two groups (e.g. comparing White British with all other ethnic categories grouped together). However, employers will be encouraged to report pay for as many ethnic groups as they can.
- On disability, the proposal is to use the Equality Act 2010 definition as the basis for identifying disabled employers, and that a ‘binary’ (disabled/non-disabled) approach would apply to pay gap reporting.
- The consultation also seeks views on whether employers should have to produce action plans for ethnicity and disability pay gap reporting, to help employers identify why they have a pay gap and how they intend to close it.