PwC reveals ethnic minority pay gap as Low Pay Commission focuses on gender

Out-Law News | 18 Sep 2017 | 5:08 pm | 2 min. read

Consulting firm PwC has revealed the pay gap between its white and black and minority ethnic (BAME) employees for the first time.

In a significant step the company reported on its BAME pay gap in its annual report, becoming the first major company to produce such data. It said the mean pay gap for BAME staff compared to other staff was 12.8% and the mean bonus gap was 35.4%.

PwC said the gap was “entirely driven by the fact there are more non-BAME staff in senior higher paid roles and more BAME staff in junior and administrative roles”.

Meanwhile PwC's gender pay gap was 13.7%, down from 15.2% in 2016, with the mean gender bonus gap 37.5%. Again the gap was due to there being more men in senior positions, and PwC said when this was accounted for the mean pay gap dropped to 2.9%.

The firm has also set targets for 2020 to increase the number of women and BAME employees reaching its most senior grades.

The data on PwC's gender pay gap came as the UK's Low Pay Commission released a report focusing on the national minimum wage (39 page / 307KB PDF). The commission found up to one in five workers on the minimum wage may be paid less than they should, affecting between 305,000 and 580,000 people.

Earnings data analysed by the commission showed women represented two-thirds of workers aged over 25 who were underpaid. Data gathered by HM Revenue & Customs (HMRC) showed similar numbers.

Women were less likely to complain about their pay, with just over half of all enquiries about underpayment made by women despite them representing a majority of those receiving less than they should.

Employment law expert Helen Corden of Pinsent Masons, the law firm behind, said there were a number of factors as to why women were more likely to be underpaid, including occupying lower-paid positions or working part time.

“They may simply not know who to raise the issue with. Women are also less likely to mention the 'm' word [money] in annual reviews,” Corden said.

In April this year the government brought in gender pay reporting rules for all private and voluntary sector employers in England, Wales and Scotland with at least 250 employees. Similar rules are due to be introduced for the public sector. Employers caught by the regulations are required to publish their overall mean and median pay gaps based on gross hourly pay for men and women, expressed as a percentage; as well as their mean and median gender bonus gaps. They will also be required to publish the proportion of male and female employees within each 'quartile' of their pay distribution, as well as the proportion of men and women that have been paid a bonus in the preceding 12 month period.

The Low Pay Commission also said salaried workers, rather than those paid by the hour, were more likely to be underpaid as neither they nor their employer was checking their hourly rate.

It said the government needed to increase communication around increases to the minimum wage and national living wage, and there should be more publicity around the enforcement activity carried out by HMRC to increase employers' awareness of the risk of not complying with the minimum wage.

Corden said HMRC was being more proactive in its enforcement approach over the minimum wage.

“For example, it has recently launched an investigation into term-time workers at a university client, who are in the main women, to ensure that they are being paid the national minimum wage,” Corden said.

The government set up a dedicated team to ensure compliance with the national minimum wage in September 2015, increasing the penalties for companies which were underpaying staff.