Reporting the ethnicity pay gap should be mandatory for big businesses, a crossbench group of MPs has said.
A report by the Commons’ women and equalities committee called on the government to force large companies to publish pay data for workers of different ethnicities.
They say it would be the first step to addressing pay disparities between employees from different ethnic backgrounds.
Gender pay gap reporting has been mandatory for companies with more than 250 employees since 2017 but no such condition exists to monitor pay disparity for workers of different ethnicities.
“The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration.”
- Caroline Nokes
Their report said: “Research shows that closing the ethnicity pay gap makes business and economic sense.
“Ethnically and culturally diverse businesses can see up to 36 per cent more profitability, while addressing race inequalities in the labour market could boost the UK economy by £24 billion a year.”
They say the government should make it mandatory by April 2023 and provide employers with data protection guidance.
Committee chair and Tory MP Caroline Nokes said the government’s failure to move forwards on ethnicity pay gap reporting was “perplexing”.
“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,” she added.
“The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration.”
In 2018, the department for business, energy and industrial strategy launched a consultation in which it said “it is time to move to mandatory ethnicity pay reporting”.
However the government is yet to set out its response. Business minister Paul Scully wrote to the women and equalities committee in January 2022 to say this would be done “in due course”.
A government spokesman said: “We want to ensure everyone, whatever their background, has equal opportunity to succeed and achieve on merit.
“We are considering the findings of the Commission on Race and Ethnic Disparities independent report, which included recommendations on ethnicity pay reporting, alongside feedback to our consultation on this issue.
“We will set out our response to this, as well as the women and equalities committee report, in due course.”