A Guide For Businesses with Sponsor Licences to Sponsor Overseas Workers on Ethnicity Pay Reporting
When you are a UK business with a Home Office sponsor licence it can seem as if there is guidance issued on just about everything and that immigration solicitors are always warning you that you cannot afford to ignore the latest guidance or fall foul of your sponsor licence reporting and recording duties.
Of interest to businesses who employ an ethnically diverse workforce is the latest guidance on ethnicity pay reporting.
UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers
For advice on sponsor licence management call the immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.
New ethnicity pay reporting guidance
In April 2023, the Department for Business & Trade (DBT) published new guidance to UK employers on ethnicity pay reporting.
Sponsor licence holders and key personnel will be relieved to learn that there is no mandatory requirement for UK business owners and sponsor licence holders to report on ethnicity and pay. Many sponsor licence holders are already feeling overwhelmed by the scale of their sponsor licence management duties and the requirement to report to the Home Office using the online sponsor management system.
Sponsorship Licence lawyers recommend that sponsor licence holders consider reporting on the ethnicity pay gap because, as the Department for Business & Trade explains, these types of reports can provide transparency and trust for the whole of your workforce and potentially for third parties. In addition, participation in ethnicity pay reporting can promote employee engagement.
As business immigration lawyers who offer employment law solutions and sponsor licence management services for businesses with sponsor licences, we speak to many HR directors who experience suspicion from sponsored workers that their salary is less than the wages offered to British citizens or those with settled status. Equally, settled workers can question the salaries and support on offer to sponsored employees. This is of course on top of ethnicity pay differences that can be experienced when all the employees of a business are British citizens or who hold settled status, including indefinite leave to remain.
The latest Official National Statistics reveal that some ethnic groups (such as Chinese and Indian) on average earn a higher hourly pay than white British employees. However, the statistics do not break down ethnic pay differences between ethnic British and settled workers and those who are sponsored employees. To add to the complexities of statistics, you then need to consider gender and regional and city differences. In 2019 the ONS said the ethnicity pay gap was the largest in London. That will come as a surprise to many who see London as a multicultural city that embraces diversity.
Guidance rather than mandatory reporting
The new guidance on ethnicity pay reporting emphasises that your report can either be published for internal use and learning only or can be published externally as well. The decision on who to disclose the report to is down to the employer.
In addition, if your business realises that there are things that need to improve, and you create an action plan to facilitate change, the plan is not required to be published at the same time as the report. Sponsorship Licence lawyers say that this may help promote businesses to take a hard look at ethnicity and pay knowing that their action plan can be kept confidential.
The benefits of ethnicity pay reporting
Ethnicity pay reporting can benefit a sponsor licence holder as much as their employees. For example, reporting may reveal that employees in some ethnic groups earn more per hour than other groups. That may be because your business is sponsoring senior employees on senior or specialist worker visas or the skilled worker visa and they are from a specific ethnic group by virtue of a combination of their qualifications and availability and willingness to work in the UK.
Ethnicity pay reporting may lead your business to question whether you are doing enough to recruit from within the UK (by supporting apprenticeships etc) or by internal training opportunities to enable existing employees to achieve promotion to senior positions.
Alternatively, your reporting may reveal that some ethnicities may be on lower salaries and are not progressing within the company. Further research and digging may reveal that employees who are employed on skilled worker visas are seen as ‘temporary staff’ by their immediate managers and they therefore do not receive the same training or promotion opportunities as their other co-workers. This treatment of sponsored workers can result in your business ending up spending additional resources on overseas recruitment because of the turnover in sponsored staff.
At OTS Solicitors our Sponsorship Licence lawyers can help your business manage its sponsor licence with our sponsor licence management service for a fixed monthly retainer as well as providing the latest employment and business immigration advice for your busy HR team and key personnel.
UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers
For advice on sponsor licence management call the immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.
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