Race and Career Success: Britain May Impose Wage Gap Reporting Rule

by: The Knowledge Group

October 30, 2018


Between now and January, Theresa May’s government will survey Britain’s employers on how they could report race-related pay disparities, in a move that echoes last year’s debut of mandatory gender pay gap reporting for companies employing 250+. Often, May stated, “ethnic minority employees feel they’re hitting a brick wall” when trying to advance their careers.

The Institute of Economic Affairs considers the move an undue burden. But Britain’s National Centre for Diversity welcomes the move, saying workplace bias isn’t cost-effective, CNBC reports. The Equality and Human Rights Commission in Britain makes a similar argument: Fair pay is good business.

May will also introduce the Race at Work Charter, signed by government agencies and prestigious corporations such as the advertising firm Saatchi & Saatchi. Under the Charter, entities will augment recruiting and promotion efforts for members of ethnic minorities.

Meanwhile, in the US…

The Trump administration suspended the rule requiring large companies to publicly report pay by gender. Meanwhile, a legislative wave is gaining strength. A 2016 Massachusetts law prevents employers from asking interviewees about past salaries, to help women avoid repeats of past wage discrimination. This approach is popular. It does not punish corporations; rather, it guides future practices. Similar laws have followed in California, New York City, and Puerto Rico. The idea is now being considered at the national level.

Barring salary history from coming up in the hiring process could help boost salary offers for people in ethnic minorities as well. Peter Cappelli, of the University of Pennsylvania’s Wharton School, says it could go the other way, though—hiring managers could underestimate a candidate’s pay and consequently offer a suboptimal salary.

Live Webcast

Join us for A Look at Federal and State Equal Pay Laws on November 6. An increasing focus on wage discrimination makes the topic timely and essential.

In this live webcast, Paul F. White, Partner at Resolution Economics Group, Attorney Zina Deldar at Paul Hastings LLP, and Google Corporate Counsel Peter Cooper will discuss the law, and offer advice for proactively addressing pay equity risks.