Prime Minister Theresa May announced the new policy today, explaining: “the measures we are taking today will help employers identify the actions needed to create a fairer and more diverse workforce”.
Indeed, businesses will be asked to measure their pay gap, but will they be under any obligation to act on this information?
The consultation form – which is pointedly addressed to employers, not to BAME communities and associations, or to trade unions – asks bosses what they would prefer. However, as the new gender pay gap reporting legislation does not impose a duty for companies to close the disparities between men and women’s salaries, it is a strongly possibility that race pay gap reporting will follow the same model.
While the Institute of Employment Rights is in favour of pay auditing legislation, we emphasise that the devil is in the details when it comes to effectiveness.
In Rolling out the Manifesto for Labour Law – 25 recommendations for reform, supported by the Labour Party – we propose that pay gap reporting duties are expanded to cover employers of 50 or more employees (it currently only applies to organisation with at least 250 staff) and should measure pay disparities by race, sex and disability.
Further, they should require employers to devise and implement plans to eradicate pay inequalities among these groups, and these plans should be overseen by trade union representatives where unions are recognised, and equality officers where they are not.
These actions should be underpinned by sectoral collective bargaining, through which unions would negotiate with employers’ associations in each industry for decent pay and conditions for all workers. These agreements should take the protected characteristics of workers into account and be equality-proofed, with the option for members to take a discrimination claim to the Central Arbitration Committee if they feel agreements are not up to scratch.