Is pay gap reporting about transparency or accountability? This was the main theme of the House of Lords debate on Ethnicity Pay Gap Reporting (EPGR) on 25th October 2021, unlike the Commons debate that preceded it in September. The 9 peers who spoke could be split between those who see EPGR as an exercise in employer transparency and those who see EPGR as an exercise in employer accountability and I consider this to be a fundamental question that has not yet been answered. In this article, I will discuss the implications of both answers to this question for any future EPGR legislation.
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This post was updated on 10th October 2021 with the latest data
The government requires all organisations employing 250 or more employees to submit gender pay gap data. All data is available to the public and can be found on the government’s gender pay gap website. I have downloaded this data and created a spreadsheet tool to present the data in a more user-friendly and visual format.
The UK Parliament debated Ethnicity Pay Gap Reporting (EPGR) on 20th September 2021 in Westminster Hall. Seven MPs spoke in the hour long debate and, as debates go, I thought it was actually quite good. There was cross party consensus on the merits of EPGR but I saw a divide between those who recognise EPGR is complex and requires trade offs and those who think the complexities of EPGR can be solved with government guidance.
The UK Parliament is about to debate whether or not ethnicity pay gap reporting (EPGR) by UK employers should be made mandatory. The debate will start at 4.30pm on Monday 20th September 2021 and is a result of an e-petition reaching the threshold to require a parliamentary debate. To assist MPs, journalists, campaigners and anyone else interested in this debate, I have written a briefing note which lists 9 key points that need to be addressed during the debate.
When I submitted my evidence to the Commission on Racial and Ethnic Disparities (CRED) in November 2020, I recommended that ethnicity pay gap reporting (EPGR) using the Big 5 ethnicities of White, Asian, Black, Mixed & Other be made mandatory. In the CRED report published in March 2021, recommendation 24 called for analysis of ethnicity to use the Office of National Statistics (ONS) 18+1 ethnicities as much as possible and it is my opinion this is one of the reasons why CRED stopped short of recommending mandatory EPGR in recommendation 9. In June 2021, I published 7 + 5 recommendations for improving gender pay gap reporting (GPGR) and I made it clear that all 12 of my recommendations would also apply to any EPGR system introduced by the government. However, I stated my 2nd recommendation on number of categories to be reported needed more details before it could be applied to EPGR and this article will fill in those details whilst also recording my response to recommendations 9, 10, 23 & 24 of the CRED report.
This article was last updated using data submitted as of 4th September 2021.
In February 2021, the EHRC confirmed that all employers with a headcount of 250 employees or more would have to submit their gender pay gaps based on the 2020 snapshot date. Due to the lateness of this confirmation, they also stated that no enforcement action would be taken prior to the end of September 2021. As result, fewer employers than expected have reported 2020 data so far so I have used two methods of imputation to estimate that the median gender pay gap among these employers narrowed by 0.2 to 0.3 pence in the pound in 2020.
Five months ago, I introduced the gender swap number as a superior statistic to the median gender pay gap. Feedback from clients and others since then has confirmed my hope they would find it more intuitive to use and interpret. This encouraged me to call on Parliament to amend the UK gender pay gap legislation so that swap numbers could be published for employers with 250 or more employees. I now want to build on this by showing a couple of simple calculations that can turn a swap number into an estimate of how long it will take an employer to close its pay gap.
When gender pay gap reporting was introduced by the government for the 2017 snapshot date for all employers with a headcount of 250 or more, it was made clear they would evaluate how the legislation had worked after 5 years. We are now in the 5th year of pay gap reporting and I would like to submit to the government 7 recommendations to improve the way employers’ data is reported and 5 recommendations to improve the data used in the calculations and to reduce various distortions.
Ryanair has the largest (verified) gender pay gap of any employer in the UK, they didn’t bother to report their 2019 pay gap, they are leaving their 2020 pay gap reporting to the last minute, it’s pay gap narrative is only 1 page, they incorrectly use pie charts to represent the pay gap and they have a dodgy bar chart the Liberal Democrats would be proud of! But apart from all that, Ryanair’s gender pay gap report is a shining example that all other employers could learn from. Out of the hundred plus pay gap narratives I have read so far, Ryanair’s is my favourite.
It’s April 2029 and the government is trumpeting the fact that no employer in the UK has a gender pay gap or ethnicity pay gap. All employers say that their median woman’s hourly pay is the same as the median man’s hourly pay and their median white employee’s hourly pay is the same as their median non-white employee’s hourly pay. Would you be joining in the celebrations?