MPs: Ethnicity pay gap reporting should be mandatory in 2023

Slow progress is 'perplexing' says Women and Equalities Committee chair

Ethnicity pay gap reporting should be mandatory from 2023, a cross-party group of MPs told the government this week.

The Women and Equalities Committee (WEC) argued companies with 250 employees or more, which are already required to report their gender pay gap data, are well positioned to begin reporting ethnicity pay gap data from April next year.

Companies of this size should also be required to publish “an accompanying statement and action plan, allowing employers to account for pay gaps and outline steps to be taken to address them,” the WEC stated.

A CIPD report published a report in September that found just 13 of the UK’s top 100 listed companies currently report their ethnicity pay gap.

WEC chair, Caroline Nokes MP (pictured), said the slow progress on this area was “perplexing”. The government consulted on ethnicity pay gap reporting 2018 but has not yet published a response.

In October last year a debate on the topic took place in the House of Lords this week, which concluded the “way forward” would be “announced in due course”. 

On 10 January this year, Paul Scully MP told the WEC the government would also respond “in due course”.

Read more:- Investment industry should lead by example on ethnicity pay gap reporting

Nokes said: “We already have the systems and structures in place to start reporting on the ethnicity pay gap, as well as a clear impetus – tackling inequality benefits not only marginalised groups, but the whole economy.

“The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration. 

“Last week, the government made bold promises to ‘level up’ geographically. Time and again it proves itself to be blind to the importance of levelling up within our communities and address long-standing disparities along the lines of protected characteristics.

“By taking this small step, the government would demonstrate its commitment to working with business to reduce inequality.” 

Some investment firms have demonstrated the ‘systems and structures’ are in place to report, including M&G, which has released its 2020/21 ethnicity pay gap, and others are preparing to follow suit.