Marvin OnumonuThe Government has confirmed it will make ethnicity and disability pay gap reporting mandatory for firms with 250 or more staff.
The move is part of efforts to improve pay transparency and tackle workplace barriers for minority ethnic groups and disabled people.
Six pay gap metrics and new workforce composition data will have to be published by large employers.
The rules will follow gender pay gap reporting, aiming to keep the process simple for businesses.
A Government consultation showed 87% backed the new reporting.
The response included draft clauses for the law, created with input from businesses already publishing this data.
Minister for Equalities Seema Malhotra, said: “No-one deserves to be held back at work because of their ethnicity or disability.
“Everyone should be able to expect fair pay and progression opportunities for their hard work.
“By introducing ethnicity and disability pay gap reporting, this Government is committed to ensuring transparency and tackling unfairness where it exists, promoting inclusion in our workplaces and our economy.”
Malhotra added: “The government wants to ensure that whoever you are, wherever you come from, Britain is a country that will respect your contribution and give you a fair chance to get on in life.”
Minister of State for Social Security and Disability Stephen Timms, said: “Disabled people deserve the same chance as everyone else to be rewarded fairly at work, but the fact is that pay gaps exist.
“Pay gap reporting will give organisations the data they need to reduce these gaps and improve fairness and inclusivity in the workplace.
“This is part of this government’s mission to break down barriers to opportunity to deliver transparency, clarity and fair pay for all.”
Baroness Lawrence, chair of the Race Equality Engagement Group, said: “Ethnicity and disability pay gap figures can help root out inequalities in workplaces.
“The transparency they provide supports businesses in ensuring everyone has a fair chance to contribute to their full potential.
“That’s why, both personally and in my role as Chair of the Race Equality Engagement Group, I am pleased to see the significant support for ethnicity and disability pay gap reporting and welcome the government’s commitment to legislate as soon as possible.”
The Government also pointed to wider support, including a £3.5bn employment package and the expansion of WorkWell.
Up to 250,000 people will be supported to stay in or return to work, with 300,000 sick or disabled people getting tailored help via Connect to Work by the end of the decade.
REACTION:
Jackie Henry, managing partner people & purpose at Deloitte:
“Deloitte first published its ethnicity pay gap in 2017. Being open about our data has helped us take more focused action, such as our Future Leaders Programme, which provides tailored support and sponsorship of women and ethnic minority colleagues.
“We built on this in 2024 by publishing our pay and bonus gaps for disability and socio-economic background for the first time and in 2025 by publishing our pay and bonus gaps for sexual orientation.
“This has given us a starting point to measure progress, keep us accountable, and help us improve our inclusion plans.
“There is no quick solution to improving diversity and inclusion in business. Meaningful and sustained change will take time and requires ongoing transparency.”
Phillippa O’Connor, chief people officer at PwC:
“As an early advocate of inclusion in the workplace and transparent pay reporting, PwC has seen first‑hand how greater transparency sharpens focus on where progress is being made and where more work is needed.
“Publishing and analysing our data has strengthened our ability to take a robust, evidence‑led approach to inclusion, grounded in a clear understanding of the lived experience of our people.
“Transparency is not an end in itself, but a starting point – creating accountability, encouraging open and ongoing conversations, and enabling organisations to turn insight into action that genuinely moves the dial on fairness, progression and opportunity.”
Katie Scott-Caesar, head of D&I programmes at BP:
“Our ethnicity pay gap reporting provides valuable insight into patterns of ethnicity representation across our organization, supporting us in identifying where further focus may be needed and where barriers need to be addressed.
“These insights help inform the actions we take to strengthen inclusion and ensure all colleagues can develop and thrive.
“We recognize that progress in closing pay gaps is not always linear, and the transparency of this reporting helps us prioritize our efforts, monitor our progress, and continue to build a more inclusive workplace.”
Christos Tsaprounis, people and culture director at Autotrader:
“We started reporting our disability pay gap because we believe transparency and accountability are essential if we want to build a workplace where everyone can be at their best.
“Publishing the data helps us understand where representation and progression aren’t yet where they should be, track whether our actions are working, and keep focusing on the systemic changes that create a truly inclusive culture.
“As the UK moves towards making disability pay gap reporting mandatory, we will continue to report voluntarily — and we’d encourage other employers to do the same.
“Collect the data, share it openly, learn from it, and use it to drive meaningful change.”
Sandra Kerr, race equality director at Business in the Community:
“Business in the Community is hugely supportive of this major step forward towards closing ethnicity and disability pay gaps once and for all – something we have been campaigning for, for many years.
“Following the King’s Speech in July 2024, it is great to see this being followed through into action and implementation.
“Leadership and mandatory reporting are critical to unlocking an estimated £17 billion annually for the UK economy by making ethnicity pay transparency standard business practice, which evidence shows can help employers attract and keep top talent in their workforce.”
Melissa Blissett, pay gap analytics lead at Barnett Waddingham:
“This will transform gender pay gap reporting to a requirement for organisations to publish a full equality action plan.
“Data requirements are no longer two-dimensional, it’s not just male versus female.
“Organisations will have the challenge of analysing data across multiple ethnicities and consider how to report intersectionally – for example, comparing the gender pay gap segmented by ethnicity.
“Challenges will arise for organisations around data collection, especially for disability, where individuals may be less willing to disclose.
“Deeper data analysis will be essential, to enable organisations to provide a data-led explanation and be able to tell their own diversity story with clarity and confidence.”
