PwC has recently released a report based on research they conducted where 80 companies were surveyed. It showed that:-
- 95% have not examined their ethnicity pay gap;
- 40% stated that they have legal concerns around such data collection; and
- Three quarters said that they did not presently have sufficient data to analyse their ethnicity pay gap.
The report follows the closure of the government consultation, in January 2019, on mandatory ethnicity pay reporting.
There is a general view that ethnicity is an even more significant factor in determining pay than gender. However, it is more difficult to calculate as data on race is not often collected by businesses. This is demonstrated by a 2018 Resolution Foundation Report which suggested that the pay gap is highest for black male graduates who earn an estimated 17% less on average than their white counterparts. Pakistani and Bangladeshi men also earn on average £4 less per hour compared to their white peers.
Mary Agbesanwa, co-chair of the multicultural business network at PwC shared her view on ethnicity pay gap asserting that “the longer you leave it, the more complicated and costly it will become”. Ms Agbesanwa advised that “starting now with the necessary planning and honest communication will earn employee trust and confidence”.
However, Nandini Das, change consultant at PwC, warned that “the complexity of this issue is far from limited to the data collection exercise” as there is “a lot of hesitation” in regards to the approach organisations need to take “to balance the need for data and reporting with engagement, communication and building trust” with its employees.
The government has launched a series of measures to tackle barriers facing ethnic minorities in the workplace, the introduction of mandatory ethnicity pay gay reporting being a possible procedure.
It is not certain what will come about as a result of the government consultation on mandatory ethnicity pay gap reporting although it seems highly likely that in the future this will become a new requirement to accompany gender pay gap reporting.
However it is evident that many issues will be faced, especially under GDPR as ethnicity is classified as ‘special category’ data. This means it could pose as a risk to an employee’s fundamental rights and freedoms and expose them to unlawful discrimination and potentially breaches of personal data.
If you have any questions about the topics discussed in this article, do not hesitate to contact a member of the employment team.
For more information please visit the pages below.
pwc.uk - ethnicity pay gap report