Pay Reporting is Being Extended to the protected characteristics of Ethnicity and Disability.

In the King’s Speech in July 2024, the government committed to extend mandatory pay gap reporting, for organisations of over 250 employees, to include reporting on ethnicity pay gaps and disability pay gaps.

This is in addition to the existing requirements to report on CEO pay and the gender pay gaps.
A public consultation ran in 2025 with 70% agreement to the proposals.
Notably:

• • large employers should be required to report their ethnicity and disability pay gaps
  • large employers should be required to report on the overall composition of their workforce by ethnicity and disability (also referred to as ‘workforce reporting’)
  • large employers should be required to report the proportion of their employees who did not share their ethnicity or disability status (‘declaration rates’)
  • large employers should be required to produce ethnicity and disability action plans, to tackle the causes of any ethnicity and disability pay gaps
  • there should be additional reporting requirements for public bodies (breaking down pay differences further by grade and/or salary band, and publishing data on recruitment, retention and progression)
  • ethnicity data should be collected using the ethnicity classifications set out in the Government Statistical Service’s (GSS) harmonised ethnicity standard and aggregated in line with guidance from ONS
  • ethnicity pay gaps should be reported with the minimum of a binary comparison and require at least 10 employees in each group being reported on
  • disability pay gap reporting should take a binary approach (disabled and non-disabled) and use the Equality Act 2010 definition of disability
  • disability pay gaps should require at least 10 employees in each group being reported on

Respondents also agree that
where possible, ethnicity and disability pay gap reporting should mirror the existing framework for mandatory gender pay gap reporting.

• • They should:
    o use the same geographic scope
    o require the same 6 calculations
    o share the same ‘snapshot’ dates for collecting pay information and statutory reporting dates
    o require employers to upload their ethnicity and disability pay gap data to an online reporting service
    o be subject to the same enforcement mechanisms

Organisations with more than 250 employees need to update their policies and processes accordingly.