The UK Government has launched a consultation on mandatory ethnicity and disability pay gap reporting for employers with 250 or more staff. This move follows its commitment to advancing workplace equality through the Equality (Race and Disability) Bill, as outlined in the Employment Rights Bill issued last October.
The consultation, which closes on 10 June 2025, proposes the use of a reporting framework similar to that already used for gender pay gap reporting.
The consultation seeks views on several key proposals. It outlines a geographical scope mirroring the gender pay gap reporting regime. This would include mandatory reporting by large private and voluntary sector employers in Great Britain, large public sector bodies in England and certain public authorities across Great Britain. Employers would be required to report mean and median hourly pay gaps, bonus gaps, the percentage of employees receiving bonuses and the proportion of employees in each of four pay quartiles. In addition, employers would need to provide a workforce breakdown by ethnicity and disability, including the proportion of employees who declined to disclose this information. This is intended to give context to the reported pay gap figures and provide a clearer picture of each employer’s approach to inclusiveness.
The consultation also proposes that employers produce annual equality action plans setting out the steps they are taking to close the gaps. This mirrors the provisions in the Employment Rights Bill, which require gender pay gap action plans. The plans aim to support reporting with real initiatives to enhance workplace equality. Employees would be able to use these plans to understand employer actions and hold them to account.
Additional Reporting Requirements for Public Bodies
The Government is considering imposing higher thresholds on public bodies such as NHS organisations and schools. These bodies would be required to provide ethnicity pay differences by grade or salary band and data on recruitment, retention and progression. The intention is to use this data to identify areas where racial inequalities persist. The Government is also seeking views on whether these additional requirements should extend to disability reporting.
The proposals include a reporting timeline that aligns with gender pay gap reporting. Private sector employers would use a pay snapshot date of 5 April each year, with reporting required within 12 months. Different snapshot and reporting dates would apply to public sector employers. The data would be reported online via the existing gender pay gap service. Enforcement is expected to be handled by the Equality and Human Rights Commission, as with the gender pay gap regulations.
Detailed Proposals on Data Collection and Reporting
For ethnicity data collection, the Government proposes using the detailed classifications from the 2021 Census by the Government Statistical Service. In England and Wales, this involves 19 categories plus an option of “prefer not to say”. Standardising data collection will help employers maintain consistency over time and enable comparisons across different organisations.
Ethnicity data reporting will be done on a binary basis, comparing White British (or the largest ethnic group in an organisation) with all other ethnic minority groups combined. Employers will be encouraged to break down the data by as many groups as possible to provide richer insights and better inform action plans. To protect privacy, data should only be reported where there are at least 10 employees in a group. If necessary, employers may aggregate some groups or report solely on a binary basis, but they are encouraged to expand reporting over time.
The proposals for disability pay gap reporting involve comparing the pay of disabled and non-disabled employees. The definition of disability under the Equality Act 2010 would apply, ensuring consistency across equality measures. Reporting would only occur where there are at least 10 employees in each group, and employees would not be required to disclose their disability status.
The consultation represents a significant step toward advancing transparency and accountability in addressing pay disparities based on ethnicity and disability in the workplace. Employers and stakeholders are encouraged to provide feedback before the 10 June deadline.
