UK government to progress mandatory ethnicity and disability pay gap reporting

The government has published its formal response to its 2025 consultation on introducing mandatory ethnicity and disability pay gap reporting for large employers.

Under the proposals, employers with 250 or more employees will be required to report their ethnicity and disability pay gaps utilising the same six measures used for gender pay gaps for both. They will also need to provide a breakdown of workforces by ethnicity and disability status and disclose the proportion of employees who have shared their demographic information, along with action plans setting out how they intend to close any gaps.

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Susannah Donaldson, an equality expert with Pinsent Masons, said the announcement marked a significant milestone towards greater transparency and equity around pay.

“By aligning these new reporting duties with the familiar gender pay gap framework, the government has signalled that it wants to create a system that employers already understand,” she explained.

“This means organisations can immediately harness their existing expertise and data capabilities to drive meaningful progress for other protected characteristics. Mandatory ethnicity and disability pay gap reporting has the potential to deliver real cultural and structural change, helping employers identify barriers, take informed action and build workplaces where everyone can thrive.

“During the consultation period, we engaged with key clients across different sectors to collate an anonymised client-led response. It was clear that whilst our clients were supportive of the proposals, they wanted as much familiarity as possible, preferring new frameworks to be based on existing gender pay gap reporting frameworks.

“It is good news for employers that the government has heard the call for modelling to be based on well-established methods.” 

New reporting obligations will follow the same process as existing gender pay gap reporting, with the same timescales and online service used for submission. The mandatory reporting obligations will also be enforced by the Equality and Human Rights Commission.

Ethnicity data will be collected in line with the standards used in national censuses, and aggregated where possible in line with guidance from the Office of National Statistics – using the five broad classifications of white; Asian or Asian British; Black, Black British, Caribbean or African; mixed or multiple ethnic groups; and other ethnic groups.

Ethnicity pay gap reporting will require employers to report a binary comparison as a minimum of white employees against employees in each of the other four broad ethnic groups. Comparisons between the four broad ethnic groups will also be required where minimum thresholds are met.

Disability pay gap reporting will require employers to report a binary comparison, comparing disabled and non-disabled employees using the Equality Act 2010 definition of disability, with a proposed minimum requirement of ten employees in categories being compared to ensure anonymity.

“While the new duties closely mirror the existing gender pay gap framework, ethnicity and disability pay gap reporting presents distinct challenges for employers,” explained Donaldson.

“Robust data collection remains a particular hurdle, with many employees especially those with disabilities reluctant to disclose sensitive information and broad disability categories risk masking vastly different lived experiences. Organisations will also need to navigate GDPR obligations carefully, ensuring anonymity and sufficient sample sizes across multiple demographic groups.

“These complexities mean that although the framework is familiar, the practical implementation will require thoughtful planning and sustained engagement.”

The new requirements come after the consultation response found that, despite progress in creating fairer workplaces, ethnic minority and disabled people continue to face significant challenges – including lower employment rates, fewer promotion opportunities and persistent pay gaps.

Responses to the government’s consultation showed widespread support for mandatory reporting, with many employers already providing voluntary reporting in those fields.  Further engagement with employers and stakeholders is planned, along with new guidance and tools to support companies as they transition to the new requirements.

“The introduction of disability and ethnicity action plans alongside pay gap reporting is not surprising since action plans are being introduced for the gender pay gap and menopause, voluntarily from April 2026 and compulsory from next Spring,” added Donaldson.

“However, gender pay gap reporting obligations have been in place since 2017 and employers have had ten years to get used to measuring and tackling that figure before being required to make action plans public.

“It’s not clear if the requirement to produce a public disability and ethnicity action plan will come into force contemporaneously with pay gap reporting around these protected characteristics. If so, this might be a particular challenge. Employers are encouraged to start undertaking an analysis of their disability and ethnicity pay gaps now to identify any problem areas and inform targeted actions.”

No timeline for reporting to begin has been trailed by the government. It is possible that the first ethnicity and disability pay gap snapshot date could be 5 April 2027, with a reporting deadline of 4 April 2028.