Research highlights the fact that a quarter of larger firms are examining the ethnicity pay gap 21 September 2020 Mounting pressure has been placed on the government to introduce mandatory reporting of the ethnicity pay gap in larger firms over recent years. The results of a survey suggest that almost a quarter of the businesses that could potentially be impacted have already begun to calculate the ethnicity pay gap, which means that they will be well prepared should it become a requirement. Findings by PricewaterhouseCoopers (PwC) show that this is an increase from just one in 10, or 5% of businesses who were monitoring this back in 2018. Additionally, 40%, or two in five, of respondents confirmed that they planned to begin calculating the ethnicity pay gap in their businesses within the next three years. PwC’s survey included 100 companies, collectively employing over one million people, and highlighted the fact that one in ten, or 10%, of firms were actually publishing their ethnicity pay gap figures voluntarily. This was an increase from 3% who confirmed doing this in 2018.
Two-thirds of respondents revealed that they were now collecting and recording data relating to their workforce’s ethnicity, in relation to 53% who confirmed this in 2018.
The research indicates that the primary reason for not calculating the ethnicity pay gap is because of a lack of data, and the difficulties in collecting data, due to GDPR considerations and concerns about raising sensitive questions relating to race and ethnicity. The government confirmed that it would make annual ethnicity pay reporting compulsory for any companies who employ over 250 staff, in line with the requirements for reporting the gender pay gap. A consultation was released back in 2018 but no further developments have been announced since it closed in January 2019.
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Ethnicity pay gap the lowest it has been since 2012 14 October 2020
The Office for National Statistics (ONS), in its latest release, has highlighted the fact that the pay gap between white and ethnic minority staff in England and Wales has fallen to its lowest level since consistent record keeping began back in 2012. Median hourly earnings in 2019 for white workers were £12.40 per hour, which is approximately 2% higher than the amount received per hour by ethnic minority workers, who were paid £12.11 per hour. This is a substantial decrease in the gap, which has historically exceeded 8%.
There are, however, higher pay gaps observed for four groups of ethnic minority employees, as follows:
16% for employees of Pakistani descent 15% for white and black African employees
• • •
15% for Bangladeshi employees
• 13% for white and black Caribbean employees
Conversely, the ONS data reveals that there are some ethnic groups who have consistently earned more than the amounts received by white workers since 2012. For example, in 2019, median hourly earnings for individuals of white Irish ethnicity were 40.5% higher than those for other white employees, at £17.55. Employees of Chinese ethnicity earned 23.1% more, at £15.38 per hour and workers of Indian descent received £14.43 an hour. When discussed in terms of gender, the ONS confirmed that ethnic minority men earned approximately 6.1% less than white men, but that ethnic minority women earned 2.1% more than white women. This seems to suggest that gender has a bearing on the ethnicity pay gap.
The age groups of individuals also affected ethnicity pay gaps. Individuals in the ethnic minority group between the ages of 16-29 appear to earn more than people of the same age of white ethnicities. This tends to change for those
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