Policy hub
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Policy team update
We have yet another ‘pay reporting’ obligation in the pipeline for payroll professionals to grapple with in the formof ethnicity pay reporting. Diana BruceMCIPPdip, CIPP senior policy liaison officer, reveals research findings and the Institute’s recommendations
I n her February 2017 report, Race in the Workplace , Baroness McGregor- Smith recommended that the government should legislate to introduce mandatory reporting of ethnicity data. At the time, the government said that the case had been made for ethnicity reporting and it expected businesses to do this voluntarily. The government asked Business in the Community to assess what steps employers had taken to haul down workplace barriers and harness the talent of a diverse workforce – they found that barriers persist in the workplace (https://bit.ly/2S70jt6). Only a small number of employers had chosen to publish ethnicity pay data voluntarily, so in October 2018 the government published a consultation (https://bit.ly/2RGJuFn) on ethnicity pay reporting (alongside a Race at Work Charter – https://bit.ly/2PAk7DK) asking how a new mandatory reporting requirement should operate. After gathering feedback from
our members and the wider payroll community the CIPP submitted its formal response to the consultation in January. From the consultation paper we extracted the questions most relevant to the payroll function and sought members’ views. The following is a summary of the feedback we received. ● ● What are the main benefits for employers in reporting their ethnicity pay information? – Our members are very much aware of the practical challenges that pay transparency reporting presents and remain to be convinced of the benefits to the employer in the same way that benefits could be demonstrated with gender pay gap reporting. Ethnicity declarations aren’t currently collected by the majority of respondents and where collected they aren’t (on the whole) stored within the pay system, thus increasing the burden to produce usable statistics. It was recognised though, that this presents a possible opportunity for the employer to be able to demonstrate
good practice and this could provide a mechanism to encourage greater equity where it doesn’t currently exist. There was, however, significant concern about the challenge of collecting and storing ethnicity data due to current low levels of employee engagement together with the ethnicity selection being a matter of information should be reported that would not place undue burdens on business but allow for meaningful action to be taken? – Whilst the majority of responses to this question favoured a single ‘one pay gap’ figure this is likely to link to the desire for increased simplicity together with the reduction of administrative burden. Reporting several pay gap figures may reflect greater accuracy (assuming a solution could be found to low numbers being reported); however, simplicity would be preferred, and it is recognised that having a number of figures based on standard classification could result in a significant number of calculations being required. It is recognised that the preference for pay quartile reporting would provide a more representative view of the distribution of pay differences. Almost a third of respondents did not know at this personal employee opinion. ● ● What type of ethnicity pay
...third of respondents did not know at this point what the preferred solution to this reporting challenge could be...
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Issue 48 | March 2019
| Professional in Payroll, Pensions and Reward |
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