Written by
Ruth Thomas
Senior Consultant and Co-Founder, CURO
LinkedIn

09 June 2020

I was due to fly this week to Minneapolis, the core of current anti-racism unrest and where George Floyd was brutally killed less than 14 days ago. World at Work’s Total Rewards conference was due to take place in the city with 1500+ reward professionals coming together to discuss the future of reward. Pay equity and reward fairness was due to be a prominent theme under discussion, in fact World at Work’s own pay equity survey indicated that completing a pay equity audit or proactive pay equity analysis was high on the agenda for many organizations in 2020.

Of course that enthusiasm to tackle the issue of fair pay was before COVID-19 hit and highlighted inequality not only in wage disparity but also other worrying disparities for ethnic minorities related to infection and death rates, which I covered in my HR Zone article.


Prioritizing equality in the workplace

I hope the Black Lives Matter movement creates a new inflection point and call to action that will mirror the catalytic #metoo movement of 2017 and drive employee bodies, companies, and governments to take action on diversity and pay equity for ethnic minorities. The uncomfortable fact is that wherever pay gaps exist, they indicate inequality in the workplace and a lack of opportunity for all employees to earn the same. 

In the US, the Bureau of Labor Statistics reported that in the first quarter of 2020 median weekly earnings of full-time workers were US$957. Among the major race and ethnicity groups, median weekly earnings of Blacks (US$775) and Hispanics (US$722) working full-time jobs were lower than those of Whites (US$979) and Asians (US$1,221). By sex, median weekly earnings for Black men were US$823 or 75.1% of the median, and Women were US$857 or 80.4% of the $1,066 median for men.

The lack of access to comprehensive pay data from employers has been a long-standing gap in the enforcement toolbox for federal agencies charged with enforcing equal pay laws. Until recently, the only mandatory reporting requirement was through the Equal Employment Opportunity Commission (EEOC) that’s been collecting pay data from certain US companies for the 2017 and 2018 periods. But in March this year, they pressed pause on the requirement for employers to submit EEO-1 Component 2 pay data and indicated that it will continue to look at the issue, potentially proposing a different means of collecting and analyzing employer payment practices in the future.

From an ethnicity pay perspective in the UK, the Office of National Statistics (ONS) report from July 2019 presented a first analysis of how differences played out revealing a mixed picture when looking at pay gaps between ethnic minority employees and White British employees. Chinese, Indian, and Mixed or Multiple ethnicity all had higher median hourly pay than White British employees while employees in the Black African, Caribbean or Black British, Other and White Other ethnic groups on average earned 5% to 10% less than their White British counterparts. The report does underline that issues around ethnicity pay are more complex and multifaceted than we see in gender pay differentials. However, mandatory ethnicity pay gap reporting legislation has stalled in the UK. 

Back in January 2019, the UK Government closed its consultation on ethnicity pay gap reporting and no action has been taken since. There has been an increasing number of employers voluntarily reporting, but this number is still small. According to a 2018 poll by BITC of 108 employers already signed up to their Race at Work Charter, nearly two-thirds of employers (63%) monitored data on pay and ethnicity - a 2 percentage point increase in 2018. However, just 31% - less than half of those collecting data - were choosing to publish their pay gap statistics.

There are already signs that change is happening.

The UK’s equality watchdog, The Equality and Human Rights Commission, announced launching an inquiry into “long-standing, structural race inequality”, which has been thrown into stark relief by the coronavirus pandemic. The Commission’s chairman David Issac said “We have a once-in-a-generation opportunity to tackle long-standing entrenched racial inequalities.”  

Similarly we’ve seen corporations making pledges and donations in the last few days, including Bank of America committing $1BN over the next four years to help support local communities addressing economic and racial inequality accelerated by the global pandemic. The programs will be focused on assisting people and communities of color that have experienced a greater impact from the health crisis.

Taking action now and together

Events of the last fortnight have only highlighted how from a position of privilege - we need to take action together now. We know the UK compulsory gender pay gap reporting has driven corporate accountability, action, and more importantly an understanding of structural issues that prevents barriers to female workplace progression. Some of those issues like occupational segregation and potential bias during key talent lifecycle events are likely to apply in ethnicity pay variance. But, there are many other structural issues such as regional location, access to education, country of birth and generational differences which play out differently across ethnic groups.

Our company statement

The recent deaths of George Floyd, Ahmaud Arbery and Breonna Taylor and the responding global movement of protests have underlined our belief that everyone deserves to be treated fairly, humanely and live free of systematic oppression, racialized bias and violence.

As an organization that provides technology to ensure a fairer workplace for all, we understand that in society and at work people of color experience many barriers. The uncomfortable fact is wherever pay gaps exist, they reveal inequality in the workplace and a lack of opportunity for all employees to earn the same. As mentioned above, national figures on ethnicity pay gaps indicate the size of the problem; yet, legislation has stalled to enforce pay gap reporting on the basis of race. 

We want to use our position and our technology to send out a call to action.

Employers should not be waiting for ethnicity pay gap reporting to become mandatory. They should be committing to find ways to improve equality across their organizations, so every person can fulfill their potential at work. People should be treated and paid on an equitable basis - irrespective of their race, ethnicity, gender or any other protected category.

Only by analyzing employee data can we move beyond anecdotal evidence and subjectivity to truly measure inequality. Only then can we understand where disadvantage and barriers occur, in order to take corrective actions.

At CURO, we remain committed to these imperatives. 

We stand for equity, inclusion and diversity.

We unequivocally condemn intolerance – that means racism, bigotry or discrimination.

Together we can all keep learning, keep listening, and take action to make change happen.

Our pay equity technology

We provide self-serve technology that analyzes pay equity trends and gaps, no matter the complexity of data. Companies can get the analysis needed to think globally while acting locally, to create an equal and inclusive workplace. With fair treatment of their employees.

Download CURO Pay Equity product guide