Creating a fairer Britain
In principle, the process followed in an equal pay audit based on ethnicity is the same as one based on gender described above. You need to identify equal work groups by ethnicity, calculate the average pay (basic and total) for each group, calculate and investigate the pay gaps in exactly the same way.
However, ethnicity typically presents two additional challenges:
Many organisations do not have complete and accurate records of the ethnic origins of all their workers. That does not preclude comparison of pay of employees whose ethnicity is known – excluding from the comparison those employees whose ethnicity is not known (or put them in separate category). For guidance on ethnic monitoring see Analysis by ethnicity.
The number of ethnic groups and the lack of complete records means that small numbers of employees may be found in a number of ethnic categories – with attendant problems of meaningful statistical analysis. Again, that does not preclude comparisons but caution is needed in the interpretation of information.
The broadest comparison of pay by ethnicity - of basic and total pay by equal work group - will be all (known) white staff compared to all (known) minority ethnic staff. Those comparisons are useful. But they do not tell you how different ethnic groups – and men and women within them – are faring against other ethnic groups and the opposite sex.
Beyond that broad comparison of the pay of white employees compared with minority ethnic employees, the number of ethnic groups and possible categorisations means that there is a multiplicity of possible comparisons.
Precisely what comparisons you choose to make will have to depend on the ethnic make-up of your work force, the quality of your records and your views about the most meaningful statistical comparisons.
For some examples, see Typical sequence of analysis in an equal pay audit.
Evidence indicates that women from minority ethnic groups may experience 'double disadvantage' because of their gender and their ethnicity.
Provided you have you have a suitable workforce composition for analysis you can investigate this by comparing the pay of women from minority ethnic backgrounds both against white men and against white women (for equal work groups). Potential 'double disadvantage' will be revealed if the gaps favour white women – and favour white men to an even greater degree.
The precise principles for determining equal pay irrespective of race are not laid down in law. For the purpose of this guidance, we assume that the principles of the Equal Pay Act - which prescribe equal pay for equal work performed by women and men in the same employment - would 'read across' for ethnicity.