Currently ethnicity pay gap reporting is voluntary. However, MPs are currently debating whether to make it mandatory in the same way as gender pay gap reporting is for companies with 250+ employees. 

There are signs that gender pay gap reporting has instigated change and Ruby McGregor-Smith, who led a government-commissioned review of race in the workplace in 2017, said: “It is only once we see organisations publicly start to report the diversity of their workforce that we will see real change start to happen.”

According to the Office for National Statistics (ONS), the current ethnicity pay gap across England and Wales stands at 2.3%, but this varies significantly depending on location and ethnic background. For example, in its latest release on ethnicity pay gaps the ONS found that people of Pakistani backgrounds earned on average almost £2 per hour less than those identified as white British, while people from Chinese backgrounds earned around £3 more per hour.

ICAEW’s Diversity and Inclusion hub brings together timely resources on regulation and equality, along with our latest insights into diversity in the profession.