Corporate reporting – consultation on mandatory ethnicity and disability pay gap reporting

The Government has launched a consultation on implementing mandatory ethnicity and disability pay gap reporting for large UK employers.

A draft Equality (Race and Disability) Bill was trailed in the King’s Speech at the start of this parliament in July 2024. This consultation broadly seeks view on whether the existing regime in relation to gender pay gap reporting should be expanded to ethnicity and disability pay gaps (for further details on the gender pay gap reporting regime, see our Corporate Governance Fundamentals: Periodic reporting outside the annual report and accounts). For example, it asks whether:

• ethnicity and disability pay gap reporting should be made mandatory for large employers, whatever their legal form and wherever incorporated provided, they are “employers in Great Britain” with at least 250 employees;
• the same six measures used for gender pay gap reporting should be reported upon, including the difference between the mean and the median gross hourly rates of pay for different groups of employees, and the proportion of different groups of employees working across salary quartiles; and
• the data should be collated as at a snapshot date of 5 April each year and then published at a chosen date within a year of this snapshot date.

Additionally, the Government is:

• proposing to make it mandatory for employers to report on the overall breakdown of their workforce by ethnicity and disability, and the percentage of employees who did not disclose their ethnicity and disability;
• seeking views on whether employers should have to produce action plans to explain the reasons behind any ethnicity and disability pay gaps, and set out the actions they are taking to improve equality in their workforce; and
• considering expanding reporting by public bodies to include pay differences by grade and/or salary bands, and data on recruitment, retention and progression, between different ethnic groups and/or disabled and non-disabled employees.

The consultation closes on 10 June 2025. For further details on the complexities of the proposals, see the post on our employment blog here.