Last year (July 2024) Government announced its intention to legislate to deliver mandatory ethnicity and disability pay gap reporting, applicable for large employers with 250 or more employees. This formed part of Labour’s manifesto to create a “more equal society and support a growing economy”.
The Government launched a consultation which was published on 18 March 2025, to seek views on the measures it proposes to include in the upcoming Equality (Race and Disability) Bill (the ‘bill’) to introduce mandatory ethnicity and disability pay gap reporting for large employers. They went on advise that “This is the beginning of the process and we will be engaging further, including issuing a call for evidence as part of our joined-up, community-driven approach to developing policy, to inform other parts of the Bill, including making the right to equal pay effective for ethnic minority and disabled people”.
The Government proposes to use the same set of pay gap measures for ethnicity and disability as are currently in place for gender pay gap reporting, with the same snapshot dates: Public sector (31 March) and Private sector (5 April), with the addition of data relating to:
- the overall breakdown of their workforce by ethnicity and disability
- the percentage of employees who did not disclose their personal data on their ethnicity and disability
Proposals are to include additional reporting duties for the Public sector
- ethnicity pay differences by grade or salary bands
- data relating to recruitment, retention and progression by ethnicity
These additional requirements would apply to public bodies including:
- most government departments and arm’s length bodies
- the armed forces
- local authorities
- NHS bodies
- universities
- most schools, including academies and multi-academy trusts
General requirements for ethnicity reporting for both sectors will propose that there should be a minimum of 10 employees in any ethnic group that is being analysed and acknowledges that this may involve grouping ethnic groups together to meet the threshold. It also proposes an option for ‘binary classification’ where an employer has smaller numbers of employees in different ethnic groups, allowing them to report their figures for two groups.
For disability pay gap reporting the government have identified 2 approaches to calculating the disability pay gap:
- Measure the difference in pay between disabled employees and non-disabled employees – referred to as a ‘binary approach’, or
- Measure the difference in pay between employees with different impairment types and non-disabled employees.
The Consultation will close on 10 June 2025.
