The number of employers who have reported is significantly higher than the 7,008 employers who opted to publish data in respect of the 2019-20 reporting period when the obligation was suspended, and is roughly in line with the 10,840 employers that reported for 2018-19. The figures suggest that the vast majority of employers have taken advantage of the unofficial six month extension of the reporting obligation for 2020-21 and that most employers have now complied with their reporting obligations. It also suggests that the risk of enforcement action by the EHRC remains effective in spurring employers on to comply with their reporting obligations, as is the risk of negative publicity and the detrimental impact on employee/union relations.
Towards a broader understanding of diversity pay gaps
The GPG reporting regulations, introduced in 2017, require employers in Great Britain with 250 or more employees to publish their overall mean and median pay gaps based on gross hourly pay for men and women, expressed as a percentage, as well as their mean and median gender bonus gaps.
Companies caught by the regulations must also publish the proportion of male and female employees within each quartile of their pay distribution, ordered from lowest to highest pay, as well as the proportion of both men and women than have been paid a bonus in the preceding 12-month period.
Tracking data will not by itself do away with systematic workplace inequality and the government has always been clear that the reporting regime is instead designed to promote sustained and positive change over the long term, notwithstanding the way in which the pandemic and furlough scheme are likely to have skewed the data over the past two years. To that end, the government consulted in 2018 on introducing ethnicity pay gap reporting – but is yet to publish a decision on whether, and how, to take this forward.
In a recent parliamentary debate on the topic, prompted by a petition calling for new laws, MPs discussed the challenges to creating a mandatory ethnicity pay gap reporting framework. In particular, small business minister Paul Scully highlighted issues raised by respondents to the 2018 consultation around statistical robustness, anonymity, data collection barriers, the wide range of ethnic groups within the UK and the potential for skewed results.
The consultation itself proposed various options ranging from one pay gap figure comparing white employees to all employees from Black and minority ethnic (BAME) backgrounds right up to multiple figures using the five broad or 18 specific ethnic classifications used by the ONS. The former rightly raises concerns that it is overly simplistic and ignores the different experiences of each ethnic group, while the latter approach risks results that are too diluted and a report that is very complex and granular.
This year, a number of employers sought to provide ethnicity pay gap data on a voluntary basis, driven in part by the increased prominence of the Black Lives Matter movement from summer 2020 onwards and in an attempt to get ahead of any mandatory requirements. We provided examples of initiatives by Barclays Bank, BBC Studios, Centrica and others in our previous article. Since then, the CIPD has published guidance to assist employers seeking to publish this data on a voluntary basis. The CIPD, while recognising the problematic elements of this approach, suggests using a single figure and reporting on eight statistics. Six of these mirror those in the GPG reporting regime while the others – the proportion of the employer’s UK workforce from BAME and other ethnic minority backgrounds and the proportion of employees who have disclosed their ethnicity – are intended to reflect the greater complexities associated with this kind of reporting.
Another recent and major example of work in this area is by PwC, whose recent diversity figures also included a ‘class’ pay gap using social mobility data. On average, staff from a working class background received 12.1% less pay than other colleagues. On disability, PwC found that staff with a disability were paid on average 16.8% less, using median figures.
PwC is not the only employer to report on class pay: Penguin Random House, the book publisher, recently announced its socio-economic pay difference was 16.3%, and its disability pay gap was 21.6%. In the public sector, Tower Hamlets Council was one of the few employers where staff with a disability earned more than staff without a disability: the median pay gap at the local authority was 2.4% in favour of disabled staff.
In the professional services space, KPMG also recently published its overall class pay gap, of 8.6%. To drive even greater progress, it has also set a target of having 29% of its partners and directors coming from a working class background by 2030. Currently, 23% of the firm’s partners and 20% of its directors are from a working class background.
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