6 Mechanisms for pay equity 6.1 Mechanisms for pay equity internationally The literature on pay gaps overseas explores two main legislative ways of addressing the ethnic and gender pay gap: comprehensive pay transparency and mandatory annual reporting.264 Addressing ethnicity pay gaps is an emerging area of focus for policy makers globally. Most countries have not yet drafted nor implemented equal pay legislation based on ethnicity. However, the frequency of investigations into ethnic pay gaps to develop such policy is increasing, particularly in the UK.265 For example, a 2017 independent review in the UK titled Race in the Workplace: The McGregor-Smith Review looked at issues faced by businesses in developing Black and Minority Ethnic (BME) talent in the workplace.266 The McGregor-Smith review recommended that the British Government legislate for all listed companies and businesses employing more than 50 people to publish workforce data broken down by race and pay band annually. This would create more transparency and give greater insight into the current position of organisations in creating and maintaining a diverse and inclusive workplace.267 However, collecting such data has presented a challenge for some organisations. A research report carried out for the Equality and Human Rights Commission of Great Britain looked at measuring and reporting disability and ethnic pay gaps. Of those employers who responded to their survey, it was identified that, overall, only 36 percent of employers record or collect data on employee ethnicity (ranging from 35 percent of those with 10–49 employees to 38 percent of those with 50–249 employees to 60 percent among those with 250+ employees).268 Almost all of these employers (96 percent) collect or record the data through new starter forms, 64 percent through other HR record; and 27 percent through staff surveys. Large employers are more likely to collect data through other HR records (70 percent do so compared to 52 percent of mediumsized employers) and are most likely to use staff surveys to collect the data (41 percent do so compared to 39 percent of medium-sized employers and 2 percent of small employers).269 This reflects a significant disparity in the rate of data collection based on the size of the employer organisation. For instance, the Royal Bank of Scotland (RBS) collects ethnicity and disability information through a centralised HR system. In both cases, completion is optional, and there is a ‘prefer not to say’ option. 264 Brown, Rickard, and Broughton, Tackling Gender, Disability and Ethnicity Pay Gaps, 15-17; Equality and Human Rights Commission, Fair Opportunities for All, 22, 25; Employment and Social Development Canada. Employment Equity Act: Annual Report 2019. Quebec: Employment and Social Development Canada, 2019. https://www.canada.ca/content/ dam/esdc-edsc/documents/programs/employment-equity/reports/2192-EEAA-Annual-Report-2019-EN-(002).pdf; Pay Transparency Act, 2018, chap. 5, (Ontario, Canada); Senate Bill No. 973, 2020, chap. 363 (California, United States of America); New Zealand Human Rights Commission. Equal Pay and Pay Equity. Wellington: Human Rights Commission, undated, 1-3; PricewaterhouseCoopers. Ethnicity Pay Gap Reporting – A Focus on Inclusion, Equality and Fairness. London: PricewaterhouseCoopers, 2020, 2. https://www.pwc.co.uk/human-resource-services/assets/pdfs/ethnicity-pay-report.pdf. 265 Brown, Rickard, and Broughton, Tackling Gender, Disability and Ethnicity Pay Gaps, 12-14; Longhi and Brynin, The Ethnicity Pay Gap, 10. 266 McGregor-Smith, Ruby. Race in the Workplace: The McGregor-Smith Review. London: Luminous, 2017. https://assets.publishing. service.gov.uk/government/uploads/system/uploads/attachment_data/file/594336/race-in-workplace-mcgregor-smithreview.pdf. 267 McGregor-Smith, Race in the Workplace, 14. 268 Adams, Lorna, Aoife Ni Luanaigh, Dominic Thomson, and Helen Rossiter. Measuring and Reporting on Disability and Ethnicity Pay Gaps. Manchester: Equality and Human Rights Commission, 2018, 28. https://www.equalityhumanrights.com/sites/ default/files/measuring-and-reporting-on-ethnicity-and-disability-pay-gaps.pdf. 269 Adams et al., Measuring and Reporting on Disability and Ethnicity Pay Gaps, 117. Pacific Pay Gap Inquiry Literature Review 37