Following the response to the UK Government’s consultation in 2025, and a mention in the King’s Speech in July 2024, waiting for news on whether Ethnicity and Disability Pay Gap Reporting is to be mandated was as slow as getting your disclosure rates to go up. Well, this is until now, with the first confirmation that Ethnicity and Disability Pay Gap Reporting is to be mandated.
Here’s a quick breakdown of what we know so far:
Quick Key Points
What is going to go through on the Bill?
Employers with over 250 employees will need to report their ethnicity and disability pay gaps in line with gender.
What is the timeline?
Whilst the legislation is looking to pass through the Equality (Race and Disability) Bill this year, realistically implementation is likely to be phased over “several years”.
What is the hold up?
Despite some companies with decent disclosure rates voluntarily disclosing their Ethnicity Pay Gap, some haven’t even started collecting this type of diversity data.
For a large company, we have seen that getting usable data for reporting, you need at least 70% of the organisation disclosing their ethnicity (and other diversity data). This is a journey, expect it to take around three years for a larger organisation. This is mainly because within UK law, – disclosing your ethnicity, disability and other characteristics is voluntary.
We have seen on HR data collection that colleagues can opt out by skipping the question (if systems allow) or opting for: “Prefer not to say”.
How is it different to Gender Pay Gap Reporting?
On the most part the methods will be quite similar, and will extend that of gender reporting. For example, it will follow the same measures (hourly pay and bonus pay – mean, median and percentage receiving bonus / split into four pay quarters), geographical scope (including remote and overseas workers) and only applies to larger employers with over 250 employees.
- Key difference is that disclosure rates or percentage of employees who did not share their data will need to be disclosed.
- Use of standardised ethnicity categories: As a minimum employers will need to report a binary comparison (White and non-White), however it is preferable to be in line with high-level census categories (Asian, Black, Mixed, Other, White). Disability reporting will be binary and defined as per the Equality Act 2010.
- There will also be a minimum threshold for employees of each group to protect anonymity.
Any other legislation coming in?
The next proposed steps for Gender Pay Gap Reporting will include mandatory action plans in the future, there is no known date, but this is currently voluntary for the 2026-7 reporting year. This is also proposed for Ethnicity and Disability.
The Labour Government also had included in their manifesto commitments with Supply Chain, however this hasn’t been mentioned or planned.
Quick start tips on collecting data successfully
What immediate actions can I start now?
We have resources on this subject and will be holding a virtual session in May. In the meantime, here’s some quick tips to get data ready…
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Ask yourself if HR data systems are capable
It may be a good time to review and implement newer and more agile systems
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Build trust and transparency
Create a document which explains why you are collecting this data and how it will be used. Ensure that it explains that it is anonymised / aggregated, and who will see it.
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Increase disclosure rates
New to collecting data or on the diversity data journey, get your disclosure rate up with a multifaceted campaign, which includes communications to build awareness, leadership and people managers, as well as making sure everything is legal and GDPR compliant.
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Make it inclusive
Due to not having to disclose ethnicity or disability, we often find that figures are disproportionately skewed depending on reported trust from different ethnic groups or the campaigns to disclose being skewed to attract a certain demographic. Ensure campaigns are inclusive from the offset.
Get in touch
Request resources on collecting data, join a Data and Reporting Action Group, plus our consultancy team can help you get your HR data journey started. Get in touch to find out more: admin@investinginethnicity.org
Quick links
Consultancy document: Consultation outcome: Equality (Race and Disability) Bill: mandatory ethnicity and disability pay gap reporting – government response
