Companies in Britain would have to report pay disparities among ethnic groups in their workforce under a rule being considered by Prime Minister Theresa May’s government.
The idea is a response to a study published last year that showed significant pay disparities between ethnic minorities and their white counterparts in Britain. It comes after the government began requiring large companies to report pay disparities between men and women.
“Too often ethnic minority employees feel they’re hitting a brick wall when it comes to career progression,” May said in a statement.
The Race Disparity Audit, a survey of 24,000 workers last year, found that white British adults were much more likely to be employed and to own their own homes than people from ethnic minorities.
The audit found that the unemployment rate for black, Asian and other ethnic minority people, at 8 percent, was nearly double that of white British adults, at 4.6 percent. It also found that people who identified themselves as Pakistani, Bangladeshi or black received the lowest average hourly pay among ethnic groups.
“Overall, the findings will be uncomfortable,” May said when that report was released. “But it’s right that we’ve identified them, shone a light on them, and we need to confront these issues that we have identified.”
When Britain’s government started requiring companies with more than 250 employees to report their gender pay gaps last year, it found that average pay for men was higher than that for women at more than three-quarters of the 10,000 businesses that reported. Overall, it found the gender pay gap in Britain was just over 18 percent. Many hope that as the data accumulate and are publicized, businesses will be forced to do more to reduce the gap.
Sandra Kerr, the race equality director at the charity Business in the Community, said that the Race Disparity Audit “showed that all too often ethnic minority staff are still encountering significant disparities at work.”
The government said it would invite employers to offer ideas on how, exactly, to report on pay by ethnicity.
Their input will influence how such broad and complex data would be collected. At the moment, businesses in Britain report the racial background of their employees only on a voluntary basis, and such data reporting is relatively rare across Europe, where data protection rules may limit how much information about their employees the companies can store.
“While this comes with challenges, it is essential, as we believe that what gets measured gets done,” said Suki Sandhu, who founded an executive search firm and a membership organization focused on championing diversity. “When organizations see in clear figures that they have a problem, there is no other option but to act on it.”