Companies are having to step up to the plate with equality and diversity initiatives as a result of a changing social climate, says employment expert Miller Hendry.

Thanks to the effects of the #MeToo and #TimesUp movements, employers are taking on board shifting attitudes around diversity and equality, says the Tayside-based legal firm.

Legislative changes will continue to demand a shift in both process and culture for employers, according to Alan Matthew, partner at Miller Hendry and an expert in employment law.

Last year saw the introduction of gender pay gap reporting, requiring all private sector organisations with more than 250 employees to publish details of their gender pay gap for both basic pay and bonuses.

Meantime, the Government is moving to require reporting for both executive level and ethnic pay gaps. Both of these will require data capture in good time to meet future reporting requirements, says Miller Hendry.

The requirements on executive pay gap reporting will come first, with rules now in force requiring UK quoted companies with more than 250 employees to set out the ratio of the CEO’s pay and benefits compared with that of other employees.  This applies to financial years commencing on or after 1 January 2019, with the first reporting due in 2020.

Employers will also be required to produce mandatory ethnic pay gap reporting. Alan said:

“This is likely to pose many challenges for data collection, depending on the final requirements which are established. While it’s expected to be confined to organisations with over 250 employees, in line with other pay gap reporting, there have been calls to include smaller organisations of 50+ employees.”

An industry consultation has explored which employers should be involved, the ethnicity pay data to be reported and what supporting information employers may be asked to provide, such as an action plan to tackle any identified bias.  But whatever the final requirements, they are expected to be challenging to implement.

Alan said: “The consultation has looked at the challenges of collecting, analysing and reporting ethnicity pay information if it is to be meaningful. One of the problems is that there is no legal obligation for employers to collect information on ethnicity and even where they try to do so, an individual can choose not to disclose their ethnic group.” 

The Government is also exploring the possibility of a new law requiring employers with more than 250 employees to publish details of their family-friendly policies. This would mean organisations having to explain how they are supporting parents and other carers in the workforce.

One such policy is for bereaved parents.  The new Parental Bereavement Leave and Pay Act will give all employed parents the right to take two weeks off work if they lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy.

Alan said: “While the new right is not expected to come into force until April 2020, employers will need to start preparing now, and may wish to consider introducing their own bereavement leave policy, if they don’t already have one, particularly with the focus on demonstrating good practice that we are seeing.”

He added: “We are seeing a significant shift in attitudes across the sectors.  Certainly, for employers in the UK, there are increasingly tough requirements to act responsibly and inclusively. 

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