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UK Government confirms no mandatory ethnicity pay gap reporting

Posted on 22 March 2022


The UK Government has published its 'Inclusive Britain' Policy Paper in response to the 2021 Commission on Race and Ethnic Disparities Report, which includes various work-related proposals. Notably, the Government is not introducing mandatory ethnicity pay gap reporting, preferring instead to encourage a voluntary approach. Other proposals include introducing better positive action guidance and measures to promote inclusion in the workplace and address the risk of discriminatory bias in AI decision-making.

In detail

Ethnicity pay gap

The Government has no plans to make ethnicity pay gap reporting mandatory. We can, however, expect guidance for employers on voluntary ethnicity pay reporting by summer 2022. Employers who report on ethnicity pay gaps will be expected to take "meaningful action" to identify and mitigate the causes of disparate pay using tools set out in the guidance.

Positive action

Discrimination law allows employers take 'positive action' to improve representation and provide opportunities for disadvantaged groups in the workplace. However, employers need to ensure that these measures don't stray into positive discrimination, which is unlawful. To help employers understand and use positive action the Government will publish new guidance by December 2022.

Artificial Intelligence

The Inclusive Britain response acknowledges that the use of AI is on the rise and we do not yet understand its impact on ethnic disparities. The Office for Artificial Intelligence will set out the position on AI regulation in a white paper in 2022, which will cover racial bias in algorithmic decision-making. We can also expect guidance from the Equality and Human Rights Commission on the application of discrimination law to algorithmic decision-making.

Inclusion at work

By spring 2023, the Government's Equality Hub will put together an Inclusion at Work Panel. The panel will develop and share resources to help employers facilitate fairness and inclusivity in the workplace, with public sector employers and the UK Civil Service committing to leading by example in this respect.

Other measures

The Government's response recognises that many black people have had negative experiences in schools and the workplace in relation to their hair, and that afro hair is inherently linked to race. The Government highlights that this should serve as a reminder to employers that any policies and workplace requirements, for example dress codes, which put employees from protected groups at a disadvantage could constitute indirect discrimination.

More generally, the Government plans to strengthen the EHRC's ability to tackle discrimination and disadvantage by investing in the EHRC's enforcement activities through investigations and supporting individual cases.

If you would like more information on managing equality, diversity and inclusion issues in your business, please get in touch with your usual contact at Mishcon de Reya or with a member of the Employment team.

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