(Bloomberg) -- The new UK government plans to bring in sweeping new changes that would extend equal pay rights to ethnic minority and disabled workers.
For the first time, companies with 250 employees or more would have to report ethnicity and disability pay gaps, King Charles III said on Wednesday as he set out Prime Minister Keir Starmer’s agenda for the upcoming year. British businesses currently have to publish such figured as part of gender pay gap reporting.
The government’s proposed race and disability equality bill would mean pay claims bought forward by ethnic minority and disabled workers would be treated the same as those of women, who are protected under existing legislation.
The news is unlikely to come as a shock to businesses given it was a Labour Party manifesto commitment but the introduction of the bill marks a sea change from the previous Conservative administration, who had rejected a similar approach. Leading party figures such as former Business Secretary Kemi Badenoch had also pushed back on the usefulness of diversity, equality and inclusion policies more broadly, saying they could be “ineffective and counterproductive.”
Across the country, Black, African, Caribbean or Black British employees have consistently earned less than their White counterparts for at least the past decade; in 2022, these workers earned 5.6% less than White employees. Disabled employees see a gap in median pay of more than 10% compared to non-disabled employees, according to the latest figures from the Office for National Statistics.
Some experts have argued whether such measures are effective. When gender pay gap reporting was first introduced in the UK by former Prime Minister Theresa May in 2017, the pay gap was 9.4% for full-time workers. That number was 7.7% in 2023, the last year that data was published.
Read Next: Britain’s Gender Pay Gap Has Widened for Full-Time Workers
©2024 Bloomberg L.P.
