INTRODUCTION
Ethnic minority employees are disproportionately concentrated in lower-paid, less secure roles and remain under-represented in senior and decision-making positions. These patterns are shaped by a combination of organisational practices and wider social dynamics, including informal networks, proximity bias, cultural exclusion and persistent stereotypes about who is seen as “leadership material.” Long-standing assumptions about which roles and professions are appropriate for particular groups continue to influence recruitment, development and promotion, reinforcing inequality across the workforce. Understanding and addressing these structural drivers is essential if the ethnicity pay gap is to be closed in a meaningful and sustainable way.
EQUAL PAY AND THE ETHNICITY PAY GAP
It is important to distinguish between equal pay and the ethnicity pay gap, as they address different aspects of pay inequality and require different approaches. Equal pay refers to the legal requirement that individuals doing equal or comparable work must receive equal remuneration, regardless of gender, ethnicity, or any other protected characteristic. It focuses on direct comparisons, ensuring that two people performing the same or similar roles are paid fairly and without discrimination. Equal pay is governed by legislation such as the Equal Pay Act 1970 and the Equality Act 2010 and can often be identified and addressed through individual cases or legal redress. In contrast, the ethnicity pay gap (EPG) is a broader measure. It reflects the difference in average earnings between ethnic minority groups and their white counterparts across an organisation or workforce, regardless of role. The EPG is not necessarily about unlawful discrimination in individual pay decisions, but rather about the distribution of people across roles, grades, and pay bands. It highlights systemic issues such as underrepresentation in leadership, overrepresentation in lower-paid roles, and barriers to progression. While equal pay and the ethnicity pay gap are distinct, they may be correlated in environments where bias or discrimination shapes both pay-setting and access to opportunities. For example, if certain ethnic groups are disproportionately placed in lower- paying roles or lack access to development opportunities, this can reinforce both unequal pay outcomes and wider pay disparities. This report focuses specifically on the ethnicity pay gap, its causes, implications, and the strategies needed to close it. While equal pay remains a fundamental legal and ethical obligation, the EPG offers a window into structural inequality that extends beyond individual cases and points to the need for systemic reform.
“Pay equity is about social cohesion. It is about trust” – Professor David Mba “You narrow the gap by being intentional about what you can influence.” – Shauna Roper
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