The Liberal Democrats have announced their plan to introduce mandatory reporting on the ethnicity pay gap for organisations with 250 employees or more.

Jo Swinson, the former Business Minister, commented:  “....the country is failing to make the most of talent in the workplace. Information is powerful, and while organisations are allowed to get away with keeping patchy records, we'll never know the full extent of the gap.”    She continued: “Transparent data on the Black and Minority Ethnic pay gap will help employers focus on what they need to do to ensure equal opportunities at work for people of all ethnic backgrounds.”

According to a Fawcett Society report, Pakistani and Bangladeshi women see the biggest overall gender pay gap at 26% and Black African women experience the largest full-time gender pay gap at 19.6%.  Black African women have seen virtually no progress since the 1990’s in closing the gender pay gap with White British men, with a full-time pay gap of 21.4% in the 1990’s and 19.6% today. When part-time workers are included, this figure rises to 24%.

The report by the Fawcett Society – the UK’s leading charity for women’s equality and rights at home, at work and in public life - monitors the progress over more than 25 years and the analysis reveals real inequalities.  As the data is not routinely collected by the Office for National Statistics, it was calculated using the Labour Force Survey.

The report shows that:

• Pakistani and Bangladeshi women experience the largest aggregate (i.e. including full-time and part-time workers) gender pay gap at 26.2%.
• Indian women experience the biggest pay gap with men in their ethnic group at 16.1%.
• White British women have a larger pay gap than Black Caribbean women, Indian women or those who identify as ‘White Other’.
• Women who identify as ‘White Other’ are the only group who have seen their pay gap widen since the 1990’s from 3.5% to 14% today. This is mainly because the composition of this group has changed over time and today it is largely comprised of central and eastern European migrant women - many of whom are in low paid work.

Sam Smethers, Chief Executive of the Fawcett Society commented, “This analysis reveals a complex picture of gender pay gap inequality” and added “For these groups this is a story of low labour market participation and low pay when they are in work together with high levels of unpaid caring work.”

However, the report also reveals some women experiencing real progress.  Black Caribbean women in full-time work have overtaken Black Caribbean men so that they now have a reverse pay gap of -8.8%. They also fare better than White British women when compared with White British men (a 5.5% versus 13.9% pay gap).

Gender Pay Gap by Ethnicity in Britain calls for the gender pay gap ethnicity to be routinely measured and, after calculation, the ONS should release figures on a regular basis.  In addition they say, pay for the lowest paid should be increased - as many of those women experiencing the largest ethic gender pay gaps are working in some of the lowest paid jobs.

As part of their manifesto, the Labour Party is stating that they would introduce a civil enforcement system to ensure compliance with gender pay gap reporting and the Conservative Party have also pledged to introduce ethnicity pay gap reporting if they come to power in June.

Dr. Jill Miller, diversity and inclusion adviser at the CIPD, states that a Tory or Lib Dem government would inevitably consult with the HR community to ensure that race pay gap reporting proposals were “fit for purpose”.   If they were not, Dr. Miller fears that “pay reporting could end up being seen as a burdensome tick box exercise that’s another cost of doing business, rather than a driver of workplace, economic and societal change”.