The UK government has made clear, in its “Inclusive Britain” policy paper published on March 17, that ethnicity pay gap reporting will not be mandatory for employers “at this stage.”

It has said one of the reasons for this is that it does not want to impose more reporting burdens on employers as they recover from the pandemic but it’s not clear if (or when) this will be back on the agenda.

Even though ethnicity pay gap reporting won’t be mandatory right now, many employers have already begun voluntarily publishing information about their ethnicity pay gaps to address pay disparity. To support voluntary publishing of this data the government expects to produce guidance this summer on how to do this.

This is expected to:

• Include guidance on data collection and employee confidentiality which is often a complex area.
• Encourage employers to use data about specific ethnic groups rather than broader categories when publishing, as different ethnic groups within a race can have different outcomes. For example, statistics from the Office of National Statistics has previously shown that Bangladeshi and Pakistani employees received significantly lower salaries than individuals of Indian or Chinese descent even though they could all potentially be categorised in some reports as “Asian.”
• Encourage employers to produce a diagnosis and action plan, setting out the reasons for and steps to address pay disparities. It plans to do this by including “compelling case studies” based on employers who are already reporting to show employers what a good action plan looks like.