{"id":5430,"date":"2024-02-03T22:26:55","date_gmt":"2024-02-03T22:26:55","guid":{"rendered":"https:\/\/marriott-stats.com\/nigels-blog\/?p=5430"},"modified":"2024-02-04T19:32:22","modified_gmt":"2024-02-04T19:32:22","slug":"mandatory-ethnicity-pay-gap-reporting-looks-like-disability-confident-not-gender-pay-reporting","status":"publish","type":"post","link":"https:\/\/marriott-stats.com\/nigels-blog\/mandatory-ethnicity-pay-gap-reporting-looks-like-disability-confident-not-gender-pay-reporting\/","title":{"rendered":"Pay Gaps #30 – Why Disability Confident is the Template for Mandatory Ethnicity Pay Gap Reporting"},"content":{"rendered":"

In July 2023, the UK government’s finally published its response<\/a> to its 2018 consultation on whether #ethnicity<\/strong> #paygap<\/strong> #reporting<\/strong> should be made mandatory for UK employers.\u00a0 A number of paragraphs from this response were quoted in an article published at the time in The Voice newspaper<\/a>.<\/p>\n

I want to go through two of those paragraphs because they highlight what is wrong with the current debate. I think the debate can be reset in a more productive direction if campaigners and the government were to focus on Action 71 of the Inclusive Britain action plan<\/a> instead of Action 16.\u00a0 In short, those who wish to implement mandatory ethnicity pay gap reporting should use existing Disability Confident reporting scheme as a template to build on and not copy and paste Gender Pay Gap Reporting.<\/p>\n

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Why pay gap reporting is needed<\/strong><\/span><\/h5>\n

\u201c<\/em>Key to this is gaining a good understanding of the particular issues which may be driving those disparities. Introducing an effective<\/strong> pay reporting system is one way to achieve that because it helps employers build an evidence<\/strong> base for relative pay across ethnic groups and identify <\/strong>unexplained gaps. But, employers need flexibility<\/strong> to do this well,<\/em>\u201d\u00a0 <\/em>Page 7 of PDF version of government response<\/em><\/a>.<\/em><\/p>\n

This is absolutely correct on both points. Unless you analyse your own data to understand why ethnic disparities exist in your organisation, you won’t know where to start on addressing them. To do this effectively, employers need flexibility as the issues faced by an investment bank in central London will differ from those faced by a primary school trust based in Cumbria.<\/p>\n

That paragraph also tells me the government is signed up to the principle <\/strong>of mandatory public reporting. After all, this is the same government that brought in gender pay gap reporting, pay ratio reporting, modern slavery act, etc, so they have a track record in this regard. However, …<\/p>\n

How should pay gaps be reported?<\/strong><\/span><\/h5>\n

\u201cThis consultation highlighted genuine difficulties in designing a methodology for ethnicity pay reporting, with mixed views on the best metric<\/strong> to use. It is therefore clear that it is not appropriate for the government to mandate a particular methodology<\/strong>.<\/em>” Page 7 of PDF version of government response<\/em><\/a>.<\/em><\/p>\n

The last sentence is again spot on. Mandating a particular methodology takes away the employer flexibility to address disparities peculiar to their location and sector e.g. London Bank, Cumbrian School, National Fast Food Chain, Scottish Energy Firm, etc.<\/p>\n

The first sentence is also correct, but it goes to the heart of the confusion around this debate. If different areas and sectors face different challenges in respect of ethnic disparities, there is no way on earth you can come up with a single metric that can be used by all employers. Yet campaigners have consistently and explicitly called for the gender pay gap reporting metrics to be copied and pasted to ethnicity (with only minor tweaks). The government quite correctly states it is not possible to do that which is a point I have been making for a number of years<\/a>.<\/p>\n

The failure by campaigners to explicitly think about how<\/strong> ethnicity pay gap reporting should be done is a serious one which I have repeatedly warned about<\/a>. My own experience of writing the draft version of the government ethnicity pay gap guidance<\/a> in order to fulfil Inclusive Britain action 16 showed me how campaigners’ belief that gender pay gap reporting could be copied and pasted to ethnicity, was distorting the government’s understanding of what they were trying to do.<\/p>\n

This distortion resulted in a final version of the guidance that included much of what campaigners wanted in terms of metrics. As a result the guidance has \u00a0serious flaws and is unfit to be used for any mandatory reporting scheme<\/a> and therefore action 16 (shown below) has not\u00a0 been completed in my view<\/u>. I was not involved in the final version hence why I was unable to prevent these flaws from appearing.<\/p>\n

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Reset the debate with Action 71 not Action 16<\/strong><\/span><\/h5>\n

So how should campaigners progress this debate and bring about mandatory ethnicity reporting?<\/p>\n

Ironically, the government’s Inclusive Britain action plan<\/a> points the way forward. Action 71 on pages 95 & 96<\/a> commits the government to publish by Q4 2023 an Inclusion Confident <\/strong>scheme which builds on the current Disability Confident<\/strong><\/a> scheme introduced in 2016. I reproduce the second paragraph of the backdrop for Action 71 shown below.<\/p>\n

“Models such as the Disability Confident Employer Scheme help organisations to take action to improve how they recruit, retain and develop disabled people within the workplace<\/strong>. A scheme that includes but is not exclusive to ethnicity and race would, in a similar vein, provide the tools for employers to overcome barriers to in-work progression and retention<\/strong> of their ethnic minority staff, helping them to navigate a sensitive area with confidence, to deliver tangible results that benefit the employee and employer <\/strong>long term.<\/em>”<\/p>\n

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The highlighted phrases are the reasons why people campaign for mandatory ethnicity pay gap reporting in the first place.\u00a0 The fact that Action 16 appears 46 pages earlier on page 49 of Inclusive Britain shows the government and campaigners have not joined the dots between actions 16 & 71. The goals of pay gap reporting and inclusion confident schemes are identical, the difference is the starting point for employers. I only became aware of Disability Confident late in 2022 but I can now see it starts in a much better place.<\/p>\n

Why Inclusion Confident is the better starting point<\/strong><\/span><\/h5>\n

In 2022, I explained why I preferred Disability Confident reporting to Disability Pay Gap Reporting<\/a>. I started by stating the disability pay gap was a lie to someone who is disabled like me and why the disability representation gap was the relevant metric. I then pointed out how the Voluntary Reporting Framework<\/a> (or VRF<\/strong>) required for Level 3 Disability Confident<\/a> employers was already close to what I would require employers to report on for disability representation gaps. Specifically, the VRF guidance document<\/a> has these features –<\/p>\n