Employers should report ethnicity and disability pay gaps, says think tank

Pay transparency should be extended to cover ethnicity and disability pay gaps, according to a report from the Institute for Public Policy Research

The think tank called for employers to publish information on a wider range of pay inequalities in its annual Fair Pay Report.

The IPPR conducted a survey, interviews and a focus group involving 60 employers to assess the impact of the gender pay gap reporting regulations, which were introduced in April this year and require employers of more than 250 workers to calculate and publish the difference in average pay between men and women annually.

Despite initial instances of late and last-minute reporting, compliance has been high, the research stated, with more than 10,000 employers – 100% of those within the scope of the new law – reporting within 10 weeks of the deadline.

The research found that the regulations have pushed the gender pay gap, and gender inequality more broadly, up the agenda. Four in five (81.3%) large employers are now considering or have taken further measures to narrow gender pay inequalities as a result. A similar proportion expect the regulations to incentivise more employers to reduce the gap.

The research also found that there was strong employer support for gender pay reporting, with 80% stating that the regulations should be maintained. Employers were also willing to consider extending transparency to other areas including ethnicity, an option on which the government is currently consulting. Almost half (43%) said that they would support mandatory reporting of ethnicity pay gaps, and a third (34%) said they would support mandatory disability pay gap reporting.

The body said that the additional burden on employers already collecting gender pay data would be small compared with the radical extension of pay transparency it would produce. It added that the government should now extend pay transparency to gaps between chief executives and organisations' average employees.

To tackle illegal unequal pay workers should be given a ‘right to request’ comparison data of pay levels, and the right to collectively trigger an independent equal pay audit, the report added.

Joe Dromey, IPPR senior research fellow, said that employers should build on the success of gender pay transparency: “Gender pay reporting has been a big success. Transparency has driven the gender pay gap up the agenda and it is spurring employers to act.

"We should build on this success with a radical extension of pay transparency. Broader transparency on gender, ethnicity and disability would help drive employer action to tackle these burning injustices. Requiring employers to publish the number of low-paid staff would increase pressure for a fairer distribution of the wealth we all help generate.”

Dromey added that this would not be fully effective without addressing the structural causes for inequality. “While transparency will help, it alone will not tackle pay inequality. So we also need to see action from employers and from government to address the structural drivers of inequality.”