Key takeaways
New bill aims to close pay gaps
Mandatory reporting proposed for large employers.
Data transparency is central to reform
Employers must disclose workforce breakdowns.
Action plans may become a requirement
Firms expected to address inequalities directly.
Last summer’s King’s Speech confirmed the Government’s intention to introduce the Equality (Race and Disability) Bill this year. The Bill, which has not yet been published, will implement mandatory ethnicity and disability pay reporting for employers with 250 or more employees.
In anticipation of the Bill’s publication, the Government has launched a public consultation: Equality (Race and Disability) Bill: mandatory ethnicity and disability pay gap reporting on how to introduce mandatory ethnicity and disability pay reporting for large employers.
The consultation confirms that the government aims to use a similar reporting framework for ethnicity and disability to that which is already in place for gender pay gap reporting and operational since 2017. However, it goes on to note that there are also distinct considerations for ethnicity and disability, particularly in data collection and analysis. For example, employers will be required to report on the overall breakdown of their workforce by ethnicity and disability, as well as the percentage of employees not disclosing their personal data for these characteristics.
There are ongoing discussions with the devolved governments, but early indications are that the new pay gap reporting duties will apply:
large private and voluntary sector employers in Great Britain (England, Wales and Scotland)
large public sector bodies in England
certain public authorities operating across Great Britain in relation to non-devolved functions
The government is also considering:
Requiring employers to produce action plans, to identify the cause(s) of any pay gaps and the action(s) the employer intends to take to close it; and
Requiring the reporting of additional information on ethnicity by large public bodies with 250 or more employees to help identify persisting racial inequalities:
ethnicity pay differences by grade or salary bands
data relating to recruitment, retention and progression by ethnicity.
The consultation closes on 10 June 2025. A separate call for evidence, to be published at a later date, will seek views on other parts of the Bill, including how to make the right to equal pay effective for ethnic minorities and disabled people.
