The Government guides are a collaboration between the Race Disparity Unit, Equality Hub and the Department for Business and Trade. They have been published as part of an update on the Government’s progress regarding its ‘Inclusive Britain’ action plan announced last year.

The plan detailed the need to address ethnicity pay gap reporting challenges, and support employers looking to promote greater fairness in the workplace.

The guidance includes advice on collecting ethnicity pay data, and how to consider data issues such as confidentiality, aggregating ethnic groups and the location of employees, and reporting the findings.

Kemi Badenoch, minister for women and equalities, said: “The concrete actions we have delivered over the last year are improving people’s day-to-day lives, but I know that we need to do more to tackle disparities and build people’s trust in our great institutions.

“The groundbreaking Inclusive Britain Action Plan was an excellent first step, and we will continue to deliver on its promises, tackling the complex causes behind racial disparities with data-driven action. We must all work together to ensure no-one is held back by their race, social or ethnic background.”

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‘Too often BME workers are paid less for doing the same job’

But the Trades Union Congress (TUC) has called for mandatory ethnicity pay gap reporting “without delay”.

Paul Nowak, TUC general secretary, said: “The harsh reality is that even today, structural racism plays a big role in determining Black workers’ pay and career prospects.

“Too often BME workers are paid less for doing the same job as their white colleagues. Ministers must take bold action to confront inequality and racism in the labour market. The obvious first step is mandatory ethnicity pay gap reporting – not just voluntary guidance.

“And alongside publishing the raw data, every employer should have to publish an action plan setting out how they will close their pay gap. That will really drive more equal workplaces. Business and unions are united in their support for compulsory pay gap monitoring. Ministers must bring it in without delay.”