Since 2017, UK legislation has required large employers (those with 250 or more employees) to report their gender pay gap data. Proposals to extend this requirement to ethnicity and disability pay reporting were announced in the King’s Speech in July 2024 and are intended to be included in the upcoming Equality (Race and Disability) Bill.
The UK Government has now launched a consultation to “inform our next steps on developing and drafting legislation”. The consultation closes on 10 June 2025.
Details of the consultation, which comprises 33 questions (six of which are specific to public bodies), can be found: Equality (Race and Disability) Bill: mandatory ethnicity and disability pay gap reporting.
Subject to feedback from the consultation, the Government’s current proposal is that a similar reporting framework will be introduced for ethnicity and disability to that already in place for gender pay reporting, including:
- The same geographical scope for mandatory reporting, principally comprising large private and voluntary sector employers in Great Britain and large public sector bodies
- The same set of pay gap measures (mean/median differences in hourly and bonus pay; pay quartiles for hourly pay; percentage of employees receiving bonus pay)
- The same reporting date (i.e. for private companies this is a ‘snapshot date’ of 5 April to be reported by 4 April of the following year)
- Online reporting of the relevant disclosures
- Enforcement by the Equality and Human Rights Commission
Additional proposed requirements, subject to consultation, include:
- Disclosure of the overall breakdown of the workforce by ethnicity and disability
- Disclosure of the percentage of employees who did not disclose their personal data on their ethnicity or disability
- Requirement for employers to produce action plans about what they are doing to improve workplace equality for ethnic minority and disabled employees
As a minimum, the Government proposes that pay gap reporting is done on a “binary” comparison basis – for example, a comparison between pay of White British and ethnic minority employees for the ethnicity pay gap and between pay of disabled and non-disabled employees for the disability pay gap. However, employers will be encouraged to show additional pay gap measures for as many ethnic groups as they can subject to a proposed minimum of 10 employees in any group being compared in order to protect the privacy of employees and to help produce statistically robust data.
The Government is proposing that employers in England and Wales should collect ethnicity data using the detailed ethnicity classifications in the Government Statistical Service ethnicity harmonised standard that was used for the 2021 Census. For the purposes of disability pay gap reporting, the Government is proposing that the Equality Act 2010 definition of ‘disability’ be used.
For completeness, the Government is also proposing to require further information from public bodies only on ethnicity (and potentially also disability) including pay differences by grade or salary band and data relating to recruitment, retention and progression.
Details on how to respond can be found in the link to the consultation above.
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