The call follows a recommendation by national equality body Equality and Human Rights Commission this week for government to make it a legal requirement by April 2020 for employers with over 250 employees. 

The recommendation is for those firms to monitor and report on ethnicity and disability in recruitment, retention and progression, and publish a narrative and action plan alongside their data explaining why pay gaps are present and what they will do to close it.

With similar legislation already requiring firms – including recruitment agencies – across the country to report on their gender pay and bonus gap, Stephen Jennings, partner and solicitor at law firm Tozers Solicitors, told Recruiter agencies should consider taking steps to monitor ethnicity and disability.

“If the new legal requirement does come into force, agencies that are able to explain and work with clients to comply with them may well have a competitive advantage,” he said.

Jennings added he thought ethnic and disability pay gap reporting would certainly be a positive step towards improved equality and diversity in the workplace: “Assuming that this will operate in the same way as the current gender pay gap reporting obligations, relevant employers will be required to publish calculations showing pay gaps within the organisation.”

And as the proposal has an implementation date of 2020, it still affords employers enough time to address disparities in pay, Jennings said. 

“While positive discrimination is unlawful under the Equality Act 2010, some forms of ‘positive action’ are permitted. This involves an employer taking positive ‘proportionate’ steps to help remove the hurdles faced by sections of the community that are under-represented in its workforce, and it may be worth employers considering whether such steps are required to encourage equality and diversity within its organisation.”

However, Helen Murphie, London employment partner at law firm Royds Withy King, told Recruiter the proposal could prove costly and burdensome for businesses and would also force them to ask potentially intrusive questions about individuals’ ethnicity and disability.

“Regarding disability, the situation is made more complicated because not everyone who may suffer from a health condition will necessary meet the definition of disability under the Equality Act 2010.

“Pay reporting statistics may also be misleading if it follows the gender pay gap reporting criteria, as more people with disabilities work part time compared to people without disabilities, so this will skew the picture.”

Murphie added: “The government has been pushing to get more disabled people employed, and while there has been an increase, particularly for women with disabilities, the percentage of disabled people in employment is some 30% lower than those without disabilities, which is considerable.

“Despite the burden, such mandatory requirements would make big companies focus their minds on the situation and force them to think about strategies to increase the numbers of ethnic minorities and those with disabilities within their own business. They would have to practise what they preach, and also show that such candidates and staff are given equal opportunity in relation to recruitment, pay, training and promotion.”

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