Government consultation on mandatory ethnicity and disability pay reporting
On 18 March 2025, the Government published a consultation on introducing mandatory ethnicity and disability pay gap reporting for large employers. The proposals form part of the Government's broader push to improve workplace equality.
Overview of the consultation
The consultation on mandatory ethnicity and disability pay reporting forms part of the forthcoming Equality (Race and Disability) Bill, which was announced in the 2024 King’s Speech. The consultation proposes mandatory reporting for employers with 250 or more employees, in line with the existing gender pay gap regime. Employers within scope would be required to report on six pay-related measures—mean and median hourly pay, pay quartiles, mean and median bonus pay, and bonus participation rates—using the same snapshot and reporting dates already in place.
In addition, employers would need to report on the overall composition of their workforce by ethnicity and disability, including the percentage of employees who choose not to disclose this information. Employees would self-report their ethnicity and disability status, with the option to opt out.
For public sector bodies, additional requirements are being considered, including ethnicity pay differences by grade or salary band, and data on recruitment, retention and progression by ethnicity. The consultation also seeks views on whether these additional requirements should be extended to disability.
Key considerations for employers
The Government proposes using harmonised ethnicity classifications and a binary approach to data analysis. For ethnicity, employers would be required—at a minimum—to report on the pay gap between White British employees and all other ethnic minority groups combined. For disability, reporting would be limited to comparisons between disabled and non-disabled employees, using the Equality Act 2010 definition.
To protect employee confidentiality and ensure statistical robustness, data would only need to be reported where there are at least ten employees in each group being compared. Smaller ethnic groups may need to be aggregated in line with Office for National Statistics guidance.
The consultation also seeks views on whether employers should be required to publish action plans explaining any identified pay gaps and the steps being taken to address them. While the proposals are intended to drive meaningful change, concerns have been raised—particularly in earlier consultations—that such measures could risk becoming tokenistic if not supported by meaningful organisational action.
Learning points for employers
Employers should start reviewing their data collection processes to assess whether they can support the proposed reporting obligations. Encouraging voluntary disclosure of ethnicity and disability information will be critical, and employers may wish to consider how best to build employee confidence in the process. Clear internal communication and robust data governance will play an important role.
The consultation closes on 10 June 2025. Employers are encouraged to respond, particularly if they anticipate practical challenges with data collection or wish to shape how the final obligations are implemented. The full consultation is available here.