Why the Ethnicity Pay Gap Is Even More Complicated Than Gender

(Bloomberg) -- Companies in the U.K. are still grappling with the mandatory gender gap reporting reporting that went into effect last year, revealing a widespread disparity in the salaries and bonuses of men and women. Now the British government may require them to similarly analyze the pay of workers of different ethnicities.

A survey of 80 large organizations by PricewaterhouseCoopers found 95 percent had not analyzed their ethnicity pay gap, with three quarters saying they did not have the data to do so. Concerns over whether it’s legal to gather information about ethnicity and data protection topped the reasons for failing to do so, as well as poor response rates from employees, difficulties in communicating about the process and worries about worker confidentially.

“This will be a more complex task than gender pay gap reporting,” the report said. Firms “will need to create a trusting environment where employees are willing to volunteer their data and believe it will be used to drive positive change.”

Last April marked the first time larger U.K. companies and public agencies were legally required to publish an assessment of the difference between what men and women in their workforce earned on average. More than 75 percent of the 10,000 U.K. firms that reported their pay gaps paid their male workers more than female workers. Now the government is considering the possibility of mandatory reporting by ethnicity to expose the pay gap for citizens of “Black, Asian and minority ethnic,” or BAME, origins.

A public consultation ended in January and already some firms, including PwC, Deloitte, KPMG and broadcaster ITN, have voluntarily decided to release their own numbers.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Claire Suddath, Brian Swint

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