Upcoming EDI workplace reforms

What do current pay gap data guidelines look like?

Publishing pay gap data is a useful tool to achieve greater equality and inclusion. It allows companies to monitor what the difference in pay is for different groups, and measure progress in attempting to eliminate pay gaps.

Currently gender pay gaps are the only pay gap that employers are legally required to report. Research shows that there is a national gender pay gap of 9.4% in the UK. This means that for every £1 earned by the average man in an organisation, the average woman would earn 91p.

This is caused by a number of factors, including women being less represented in higher paying jobs and there being fewer women in certain companies and sectors. Pay gaps can therefore help to identify systemic discrimination in organisations and highlight the need to act. Labour’s manifesto promise to require additional pay gap reporting was reiterated in the King’s Speech earlier this year and further detail is expected soon.

The impact of representation in the workplace

For housing associations, ensuring their workforces reflect the diversity of the communities they serve is key to promoting inclusion, building trust and creating policies and services which meet the needs of all residents. This applies to ethnicity and disability as well as gender. Greater representation also improves inclusion in the workplace, identifying ways in which employers can better support their employees. For example, more attention on the needs of women in the workplace has created a focus on supporting those going through the menopause.

Part of the reason for a gap in pay is a lack of diversity and representation in higher paid jobs for minority groups. Therefore, publishing pay gap data for different minority groups highlights that that this is an issue and helps to call for organisations to prioritise diversity across different roles. It also keeps organisations accountable, which can perhaps be seen in the annual decrease in the gender pay gap. While data reporting and representation are improving across the sector, there is still work to be done.

The 2023 NHF report on the diversity of England’s housing association workforces showed that progress has been made. However, there remains a lack of gender, ethnic and disability diversity within workforces and leadership teams compared to residents. Ethnic diversity is particularly poor in executive positions, with only 3% of executives identifying as Black/African/Caribbean/Black British versus 10% of the workforce. Furthermore, 5% of housing association workforces are Asian/Asian British in comparison to 1% of executives.

Although disabled people are disproportionately more likely to live in social homes than non-disabled people, disabled people are also underrepresented in workforces and at executive level. Just 9% of the sector’s workforce reports having a disability or long-term health condition, compared to 29% of residents. Additionally, women only represent 47% of executives and 44% of board members versus 54% of the workforce and social housing residents. These figures clearly show that action needs to be taken to improve diversity, representation and inclusion.

What are the reforms?

Pay gaps

The government has stated that it will make ethnicity and disability pay gap reporting mandatory for employers with over 250 staff. This will bring regulations in line with the current guidance for gender pay gap reporting. These organisations will also be required to develop, publish and implement action plans to close their gender pay gaps and to include outsourced workers in gender pay gap and pay ratio reporting.

This change will be implemented as part of the new Equality, Race and Disability Bill. The briefing notes for the King’s speech highlighted the intention of the government to enshrine in law the right to equal pay for ethnic minorities and disabled people, which would make it easier for these individuals to bring unequal pay claims.

Menopause

Organisations with over 250 staff will need to produce Menopause Action Plans. Guidance is also expected from the government for companies of all sizes, relating to uniform and temperature issues, flexible working arrangements and logging menopause related leave and absence. This is expected to come in under the upcoming Employment Rights Bill.

While the government has not provided a timeline for when these changes will be implemented, it is likely that the government will complete this legislation within the next parliamentary year.

What advice is currently out there?

The government currently publishes guidance for organisations on voluntary ethnicity pay gap reporting. While there is no current guidance from the government on reporting disability pay, other organisations such as CIPD provide guidance on this.

PwC have suggested some actions for organisations to take in respect of these proposed changes, such as to collect ethnicity and disability data and calculate pay gaps. They state that it is also important to assess the quantity and quality of data and recommend at least an 80% disclosure rate. They also suggest it may be useful to conduct an equal pay review to identify potential equal pay risks within the workforce. Acting on this now will make it much easier to adapt to the new changes when they come into place.