We have submitted a response to the UK Government’s consultation on the Equality (Race and Disability) Bill, supporting the introduction of mandatory ethnicity and disability pay gap reporting for large employers.
In our response, we recommend that pay gap reporting should centre around pay quarter breakdowns to provide insights across the pay scale, pointing out that single summary statistics like mean or median can hide important trends.
We also highlight the need for statistical expertise in the reporting process, noting that many HR teams may lack the training to interpret complex data accurately. Therefore, better support systems, including improved data entry portals with built-in ‘sanity checks’ to reduce errors, are needed.
Our response warns against using pay gap data for league tables or benchmarking, stressing that comparisons between organisations are often not possible due to differences in demographics and sectoral contexts. Instead, flexibility with how data is collected and reported would allow employers to maximise the insights gained from this exercise.
To protect privacy and ensure data robustness, we recommend a minimum threshold of 50 individuals per category for public reporting. We also stress that disability and ethnicity reporting will require three categories at a minimum, unlike gender pay gap reporting, emphasising that an ‘unknown’ category for employees who choose not to disclose information will be necessary.
Finally, our response highlights that the ultimate goal of pay gap reporting should be to learn what works in improving workplace equality and to encourage continuous improvement, not to penalise organisations based on misunderstood statistics. Efforts should be made to ensure that pay gap statistics are not misinterpreted as ‘unequal pay’.
Read the full response here.