Introduction
Background
What is intersectionality?
Why is intersectionality an issue?
Intersectionality and dual discrimination
Intersectionality, pay gaps and small groups
How to approach intersectionality in ethnicity pay gap reporting
Comment


Introduction

The government has said that ethnicity pay gap reporting will not be mandatory, but many employers are choosing to add ethnicity pay gap reporting to their existing obligation to report gender pay gaps each year.

This article looks at intersectionality in the context of ethnicity pay gap reporting and considers why employers should think about more than just ethnicity when doing an ethnicity pay gap analysis (and more than just gender when doing a gender pay gap analysis).

Background

There is no legal requirement for employers to report their ethnicity pay gaps and, for the time being at least, that is unlikely to change:(1) the government has reversed a previous commitment to require employers to report their ethnicity pay gaps and is instead pushing forward with a voluntary regime. It is currently developing guidance to be published in Summer 2022 for employers that want to calculate their ethnicity pay gaps.

What is intersectionality?

Intersectionality is the idea that everyone has their own unique, interconnected set of circumstances that impact them. A person's advantages or disadvantages in work or in life cannot be explained with reference only to their ethnicity or their gender but by the totality of all factors.

It is evident that not all straight White men are equally privileged; some may experience workplace discrimination on many grounds, such as for being:

  • transgender;
  • disabled;
  • working class;
  • an immigrant; and/or
  • an older person.

This article focuses mainly on the intersection between ethnicity and gender and sets out how employers could be approaching intersectional issues when doing ethnicity pay gap reporting.

Many employers are rightfully taking action to address their gender pay gaps, and increasing numbers are also addressing their ethnicity pay gaps. However, if these two issues are tackled separately, it risks missing out on a key piece of the diversity puzzle. A more joined-up approach is needed.

Why is intersectionality an issue?

The data shows that there are important differences in the experiences of men and women of different ethnic backgrounds in the labour market. The most recent Office of National Statistics ethnicity pay gap data for the United Kingdom from 2019 illustrates this.

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Figure 1: pay gaps by ethnicity and gender

These figures show that not only do different ethnicities have different challenges in the labour market, but men and women do not always experience those challenges equally. For example:

  • White Irish women earn on average 22.9% more than White men in the United Kingdom.
  • Chinese men earn 31% more on average, but Chinese women earn only 2.8% more.
  • Similarly, Indian men average 19.7% more than White men, but Indian women earn 10.1% less.
  • Arab women average more than Arab men.
  • Men of a mixed White and Asian ethnicity earn 4.7% more than White men on average, but women of the same mixed ethnicity earn 9.3% less.
  • Bangladeshi men and women both earn much less on average than White men.

Intersectionality and dual discrimination

A person can bring a discrimination claim if they are treated less favourably because of their ethnicity or their gender (or other protected characteristic), but not if they are treated less favourably because of the combination of both characteristics.

This is understood most easily through an example: if an employer did not promote a Black woman because of stereotypical beliefs about Black women, the affected employee would need to show that they were treated less favourably than other White employees, or less favourably than male employees, to succeed in a claim. That employee would not have a claim if she was only treated less favourably than someone with the combined protected characteristics: White men. If the employer can show it promotes lots of Black employees and lots of women, it might be difficult for any claim to succeed.

The Equality Act 2010 contains an unimplemented section which would have allowed this type of "dual discrimination" claim to be brought. It was not implemented due to concerns that it would cause claims to become more complicated and difficult for employers to respond to. The government at the time was concerned with saving employers from "red tape". There have been occasional calls to implement it over the past decade, but nothing with any great force and it is unlikely to be implemented in the near future.

Intersectionality, pay gaps and small groups

To do any sort of pay gap analysis, a large group of people is needed. If there are too few, the calculated gaps can be unstable and liable to change from year to year. Adding or removing just one or two individuals might causes gaps to vary wildly, making it difficult to establish trends and identify real disadvantages.

In addition, when looking a ethnicity pay gaps, a simple "White versus non-White" gap can mask differences between ethnicities because as figure 1 shows, different ethnicities have different experiences in the labour market. It is usually sensible instead to calculate gaps according to five broader ethnic groups:

  • White;
  • Black;
  • Asian;
  • mixed; and
  • other.

However, because doing this means that groups become smaller, only the largest employers will be able to then go on to segment their workforce even further so that they are able to calculate reliable intersectional gaps combining both gender and these five broader ethnic groups.

How then can employers investigate intersectional issues in their workplace?

How to approach intersectionality in ethnicity pay gap reporting

There are options for smaller employers that want to investigate intersectional issues, including:

  • an analytical approach calculating adjusted pay gaps could help.(2) This is an altogether different approach to calculating a pay gap since it allows for differences in roles. It involves creating a statistical model with the output showing what degree of impact gender has on predicting pay, when all other things are equal. This model can be extended to include ethnicity, as well as an interaction term combining both gender and ethnicity. This interaction term would reveal the extent of any intersectionality issues;
  • a semi-analytical approach – employers could calculate nine gaps, combining gender with the five broad ethnic groups and comparing against white men. However, these gaps would then need to be interpreted carefully. This means looking at the size of each of these groups and considering the specific individuals used to calculate each gap. It should not be assumed that a high gap is bad and a low one is good – the data underneath the gaps should be examined. Where there are small groups with one or two "outlier" points (eg, a newly appointed senior individual in a group of otherwise low paid employees) that may be distorting the figures, the gaps should be recalculated without them; and
  • a qualitative approach – employers should speak to their staff and listen to their experiences. This might include carrying out a listening exercise or a diversity survey or an anonymous online poll (people might be more inclined to be honest if they can contribute anonymously). However, less formal approaches might also help build trust and encourage employees to confide in their employers, by creating an open and attentive environment in which to raise issues.

The most thorough strategy probably involves a combination of all three approaches set out above.

Comment

People cannot be defined solely by their ethnicity or their gender; neither one taken by itself fully accounts for someone's work – or life – experiences. Looking at the intersection of ethnicity and gender is a good start to a more holistic approach and will help ensure employers are developing initiatives and making interventions in the areas that can have an impact.

Some employers are already doing more when it comes to pay gap reporting; for instance, employers are starting to calculate gaps and publish reports covering class pay gap reporting (for further details please see "Class pay gap reporting: social mobility tool for employers?"), disability pay gap reporting(3) or LGBT+ pay gap reporting. However, many employers are looking at each of the issues in isolation and paying less attention to the intersection of protected characteristics. If intersectionality is missed from the analysis, initiatives to reduce gaps may be pulling in different directions: trying to increase ethnic diversity could reduce gender diversity and vice versa. Intersectional initiatives can therefore be an efficient way of making progress on all pay gaps. Could the future of pay gap reporting be intersectional?

For further information on this topic please contact Tom Heys at Lewis Silkin by telephone (+44 20 7074 8000) or email ([email protected]). The Lewis Silkin website can be accessed at www.lewissilkin.com.

Endnotes

(1) Further information is available here.

(2) Further information is available here.

(3) Further information is available here.