Just 13 out of FTSE 100 employers reveal ethnicity pay gaps

Only 13 of the 100 largest UK-listed employers have revealed their ethnicity pay gaps, sparking fresh calls for the government to make reporting of racial earnings disparities mandatory.

Analysis of the FTSE 100, which includes the biggest firms listed on the London Stock Exchange, found that widespread commitments from employers to take action on racial disparity in the wake of the Black Lives Matter protests last summer 2020 have yet to result in hard data.

Among those that have published figures are the developer British Land, which revealed a pay gap between white and ethnic minority staff of more than 27%, British Telecom, which reported a mean pay gap of 5.7% between white British and black African, Caribbean and British staff, and NatWest, which reported an overall 14.1% median ethnicity pay gap.

But major employers such as Next, Unilever and Aviva have yet to declare figures and the Chartered Institute of Professional Development said progress was too slow and inconsistent. Aviva said it would publish later this year.

On Monday MPs will debate making ethnicity pay gap reporting mandatory, after 130,000 people signed a petition backing the change. All employers with more than 250 staff must already publish gender pay gap figures, which do not necessarily represent unequal pay for equal work, but can show how different groups are distributed across pay bands.

“It is only once we see organisations publicly start to report the diversity of their workforce that we will see real change start to happen,” said Ruby McGregor-Smith, author of a 2017 government-commissioned review of race in the workplace that called for legislation requiring ethnicity data by salary band.

“It must be a collective goal that our organisations reflect the communities we live in and mandatory ethnicity pay data gives businesses, investors, and regulators the tools they need to see the current reality and where changes need to happen,” said Lady McGregor-Smith

But in April, the government’s Commission on Race and Ethnic Disparities said reporting should only be done on a voluntary basis.

When it previously considered mandating ethnicity pay gap reporting, the government cited “concerns around the legality of collecting ethnicity data, poor response rates from employees the need to ensure employee anonymity” as among the most common barriers.

A government spokesperson said it was considering the commission’s recommendations, alongside its own consultation, which finished in January 2019.

“Building a fairer economy means ensuring the UK’s organisations reflect the nation’s diversity,” they said. “We are considering the commission’s findings … alongside feedback to our consultation on this issue and other work…and will respond to the commission’s report in due course.”

Peter Cheese, chief executive of the CIPD, which carried out the research, said gender pay-gap reporting had accelerated progress, “and we believe the same is needed for ethnicity pay reporting… [and] will help create fairer workplaces and societies and kickstart real change”.

Sainsbury’s reported its median ethnicity pay gap was -3.1% – ie in favour of ethnic minorities over white Britons. But this was explained largely because over half of its minority staff work in London stores, earning a location premium.

The latest national figures from the Office of National Statistics for 2019 show the ethnicity pay gap across England and Wales stands at 2.3% but differs considerably across regions and is largest in London (23.8%) and smallest in Wales (1.4%). It also differs across different ethnicities. People of Pakistani backgrounds earned 16% less than those classes as white British – almost £2 an hour less on average, while people from Indian backgrounds earned almost £2 more.

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