Open consultation

Consultation document: HTML

Published 18 March 2025

Presented to Parliament by the Minister for Migration and Citizenship at the Home Office and Minister for Equalities by Command of His Majesty.

March 2025

CP 1288

Ministerial foreword 

This government was elected to deliver change. To improve the lives of working people and strengthen our country. Our Plan for Change sets out the ambitious - but achievable - milestones we aim to reach by the end of this Parliament. 

An essential element of this Plan – and our five missions for government – is our commitment to create a more equal society in which people can thrive whatever their background. The reality is far from that goal. For example, currently most ethnic minority groups earn on average less than their White British peers. Similarly, while there has been growth in employment rates for disabled people in recent years, disabled people have, on average, lower incomes than non-disabled people. While previous Labour governments introduced the landmark Equal Pay Act 1970 and the Equality Act 2010, as well as other equality-related legislation, more still remains to be done. 

The manifesto and the King’s Speech announced our intention to legislate to deliver mandatory ethnicity and disability pay gap reporting for larger employers. This important commitment, announced as part of the Equality (Race and Disability) Bill, seeks to create a more equal society and support a growing economy.

The responses to this consultation will help us to shape the draft legislation.

This is the beginning of the process and we will be engaging further, including issuing a call for evidence as part of our joined-up, community-driven approach to developing policy, to inform other parts of the Bill, including making the right to equal pay effective for ethnic minority and disabled people.

Rt Hon Sir Stephen Timms MP, Minister for Social Security & Disability

Seema Malhotra MP, Minister for Equalities

Introduction

Purpose

The government is launching this consultation to seek views on the measures it proposes to include in the upcoming Equality (Race and Disability) Bill (the ‘bill’) on introducing mandatory ethnicity and disability pay gap reporting for large employers. 

‘Large employers’ and ‘large public bodies’ are those with 250 or more employees.

The responses to this consultation will be used to inform our next steps on developing and drafting legislation.  

We are inviting responses from anyone interested in these issues. We particularly welcome views from those who may be most affected by the different measures, including:

• employers
• public sector bodies
• race and disability stakeholders
• people from ethnic minority groups
• disabled people
• disabled people’s organisations

Respondents can provide feedback on all the policy areas outlined in this consultation or on specific topics. 

Background

The King’s Speech in July 2024 announced the government’s intention to legislate to introduce mandatory ethnicity and disability pay reporting for large employers. This consultation seeks views on how these measures could be implemented. We will be launching a separate call for evidence seeking views on making the right to make equal pay effective for ethnic minority and disabled people and other areas of equality law.

The sections of this consultation on disability pay reporting have been informed by the 2021 to 2022 disability workforce reporting consultation. You can see the findings of this consultation in Annex B. The government will set out more details on our wider disability priorities after we have engaged more closely with disabled people and their representative organisations. This is in line with our manifesto commitment to ensure that their views and voices are at the heart of all we do. 

Extending mandatory pay gap reporting to ethnicity and disability

Large employers across Great Britain have been required to report their gender pay gap data since 2017. This has led to greater transparency for employers and employees. It also gives employers important data to inform their actions to address inequalities. 

The government is committed to introducing mandatory ethnicity and disability pay gap reporting for large employers. This will provide the same transparency and impetus for positive change for people from different ethnic groups and disabled people. 

We are aiming to use a similar reporting framework for ethnicity and disability to that already in place for gender pay gap reporting. But there are also distinct considerations for ethnicity and disability, particularly in data collection and analysis. 

We are seeking views on these issues to ensure that the legislation gives employers a clear framework, which results in robust data, and can be adopted by employers across different sectors.

Question 1:

Do you agree or disagree that large employers should have to report their ethnicity pay gaps?

Question 2:

Do you agree or disagree that large employers should have to report their disability pay gaps?

Read more about how to respond.

Geographical scope 

We will establish the geographical scope for these particular measures through:

• the findings of this consultation
• ongoing discussions with the Scottish and Welsh governments

For mandatory ethnicity and disability pay gap reporting, we are proposing to follow the same approach as gender pay gap reporting. That is, mandating reporting by:

• large private and voluntary sector employers in Great Britain (England, Wales and Scotland)
• large public sector bodies in England
• certain public authorities operating across Great Britain in relation to non-devolved functions

Question 3:

Do you agree or disagree that ethnicity pay gap reporting should have the same geographical scope as gender pay gap reporting?

Question 4:

Do you agree or disagree that disability pay gap reporting should have the same geographical scope as gender pay gap reporting?

Read more about how to respond.

Pay gap calculations

We are keen to minimise any additional burdens on businesses by using the same processes and systems that are already in place for gender pay gap reporting. 

We propose requiring employers to report the same set of pay gap measures for ethnicity and disability. This is based on previous feedback from employers and to ensure a consistent approach.

This would mean reporting on: 

• mean differences in average hourly pay 
• median differences in average hourly pay
• pay quarters – the percentage of employees in 4 equally-sized groups, ranked from highest to lowest hourly pay
• mean differences in bonus pay 
• median differences in bonus pay
• the percentage of employees receiving bonus pay for the relevant protected characteristic 

Question 5: 

Do you agree or disagree that employers should report the same 6 measures for ethnicity pay gap reporting as for gender pay gap reporting?

Question 6:

Do you agree or disagree that employers should report the same 6 measures for disability pay gap reporting as for gender pay gap reporting?

Read more about how to respond.

We are also proposing to make it mandatory for employers to report on:

• the overall breakdown of their workforce by ethnicity and disability
• the percentage of employees who did not disclose their personal data on their ethnicity and disability

This additional data would give context to an employer’s ethnicity and disability pay gap figures – for example, if they have low self declaration rates from their employees on these characteristics. This is not an issue for gender pay gap reporting as employers already have this data for pay purposes.

Equally, some employers may have recently increased the number of ethnic minority or disabled employees, which could contribute to larger pay gaps if people from these groups are joining at entry level. Sharing information about the proportion of ethnic minority or disabled people in an employer’s workforce can help to build a clearer picture about an employer’s overall commitment to inclusiveness. 

Question 7:

Do you agree or disagree that large employers should have to report on the ethnic breakdown of their workforce?

Question 8:

Do you agree or disagree that large employers should have to report on the breakdown of their workforce by disability status?

Question 9:

Do you agree or disagree that large employers should have to submit data on the percentage of employees who did not state their ethnicity?

Question 10:

Do you agree or disagree that large employers should have to submit data on the percentage of employees who did not state their disability status?

Read more about how to respond.

Action plans

We are also seeking views on whether employers should have to produce action plans for ethnicity and disability pay gap reporting. Action plans can help employers identify why they have a pay gap and how they intend to close it. Employers can use action plans to explain the reasons behind any pay gaps and set out the actions they are taking to improve equality in their workforce. Employees can use these plans to understand the actions that their employer is taking and to hold them to account.  Introducing action plans would also broadly align with the findings of the 2021 to 2022 consultation on disability workforce reporting. This highlighted the need for reporting practices to be supported by initiatives to increase workplace equality. 

Question 11:

Do you agree or disagree that employers should have to produce an action plan about what they are doing to improve workplace equality for ethnic minority employees? 

Question 12:

Do you agree or disagree that employers should have to produce an action plan about what they are doing to improve workplace equality for disabled employees?

Read more about how to respond.

Additional reporting requirements for public bodies

We are aiming to require further information from public bodies on ethnicity, in addition to the data outlined above. This could help improve transparency and accountability. 

We have included questions on whether large public bodies (those with 250 or more employees) should report:

• ethnicity pay differences by grade or salary bands
• data relating to recruitment, retention and progression by ethnicity

These additional requirements would apply to public bodies including:  

• most government departments and arm’s length bodies
• the armed forces
• local authorities
• NHS bodies
• universities
• most schools, including academies and multi-academy trusts

You can see a full list of public bodies.

This data could provide further evidence to help public bodies identify where racial inequalities persist – such as barriers to promotion or progression – and understand how these apply to different groups. This is particularly important given the increase in ethnic diversity seen in many public bodies’ workforces in recent years. 

Question 13:

Do you agree or disagree that public bodies should also have to report on pay differences between ethnic groups by grade and/or salary bands?

Question 14:

Do you agree or disagree that public bodies should also have to report on recruitment, retention and progression by ethnicity?

Question 15:

If public bodies have to report on recruitment, retention and progression by ethnicity, what data do you think they should have to report?

Read more about how to respond.

We are also interested in whether these additional reporting requirements for public bodies should be extended to disability.

Question 16:

Do you agree or disagree that public bodies should have to report on pay differences between disabled and non disabled employees, by grade and/or salary bands?

Question 17:

Do you agree or disagree that public bodies should have to report on recruitment, retention and progression by disability?

Question 18:

If public bodies have to report on recruitment, retention and progression by disability, what data do you think they should have to report?

Read more about how to respond.

Dates and deadlines 

Under the gender pay gap regulations, large employers in the private and voluntary sectors across Great Britain have a ‘snapshot date’ of 5 April each year to collect pay data from their employees. They have to report their pay gap data within 12 months – by 4 April the following year. Public bodies in England have a different snapshot date (31 March) and a reporting deadline of 30 March the following year. These dates were agreed after extensive employer engagement and were designed to align with other important dates for reporting data (for example, the end of the tax year for private and voluntary sector employers, and the end of the financial year for public bodies). 

We propose using the same 2 sets of dates when introducing mandatory pay gap reporting on ethnicity and disability, to ensure consistency and to reflect the previous feedback we received from employers. We also propose that employers report their ethnicity and disability pay gap data online, in a similar way to the gender pay gap service.

Question 19:

Do you agree or disagree that ethnicity pay gap reporting should have the same reporting dates as gender pay gap reporting?

Question 20:

Do you agree or disagree that disability pay gap reporting should have the same reporting dates as gender pay gap reporting?

Question 21:

Do you agree or disagree that ethnicity pay gap data should be reported online in a similar way to the gender pay gap service?

Question 22:

Do you agree or disagree that disability pay gap data should be reported online in a similar way to the gender pay gap service?

Read more about how to respond.

Enforcement

The Equality and Human Rights Commission (EHRC) currently enforces gender pay gap reporting. This is described in its enforcement policy. We propose that the same enforcement policy is used for ethnicity and disability pay gap reporting.

Question 23:

Do you agree or disagree that ethnicity pay gap reporting should have the same enforcement policy as gender pay gap reporting?

Question 24:

Do you agree or disagree that disability pay gap reporting should have the same enforcement policy as gender pay gap reporting?

Read more about how to respond.

Ethnicity: data collection and calculations

Data collection

The best way for employers to collect ethnicity data is to ask employees to report their own ethnicity. There should be an option to opt out of answering, such as ‘prefer not to say’. We propose that employers in England and Wales should collect ethnicity data using the detailed ethnicity classifications in the Government Statistical Service (GSS) ethnicity harmonised standard that was used for the 2021 Census (see Annex C). 

The format of the question varies between England, Northern Ireland^{[footnote 1]}, Scotland and Wales. This is because each country has its own specific requirements in relation to ethnicity data – for example, in Wales, ‘Welsh’ is the first option in the ‘White’ category. It is therefore recommended that the harmonised country-specific approaches are used where possible.

Using the harmonised standards can help:

• employers be consistent with their calculations in different time periods
• ensure comparability across different data collections produced by the government and other employers 
• derive more useful statistics that give people a greater level of understanding

They also provide a ready-to-use set of tested and legally sound questions.

Question 25:

Do you agree or disagree that large employers should collect ethnicity data using the GSS harmonised standards for ethnicity?

Read more about how to respond.

Calculating and reporting ethnicity pay gaps

Ethnicity pay gap reporting is most powerful when it captures dynamics across different ethnic groups and we encourage employers to try to show pay gap measures for as many ethnic groups as they can. This is because some ethnic groups may be earning much more than others. Breaking down the different categories will give a much richer picture and better inform action plans. 

However, to protect the privacy of employees (in line with the General Data Protection Regulation - GDPR) and to help produce statistically robust data, we propose that there should be a minimum of 10 employees in any ethnic group that is being analysed.

To meet this threshold of 10 employees, employers might have to add some ethnic groups together. While there are many different ways of doing this, we propose that employers follow guidance on ethnicity data from the Office for National Statistics to ensure that groupings are as coherent and comparable as possible between employers, and for an individual employer over time. The minimum threshold of 10 should apply for each aggregated ethnic group being analysed.

If an employer has smaller numbers of employees in different ethnic groups, they can report their figures for 2 groups – for example, comparing White British employees with ethnic minority employees. We call this a ‘binary classification’ and options for how to create the binary classification are described below. If binary reporting is the only available comparison possible for an employer - because showing any more ethnic groups would disclose information about individuals - we propose that employers should keep this under review and aim towards reporting on more ethnic groups in future. This can be part of their action plan.

A binary comparison can help with comparing data consistently over time so we propose, as a minimum, that all large employers report on the pay gap measures using a binary comparison. As already set out, we still encourage employers that are able to report pay gap information about more detailed ethnic groups to do so. This will help them to understand a wider range of pay gaps that might exist in their organisation.

We propose 3 options for the binary classification. These are given in order of preference:

• first, employers should report on a comparison between White British employees and all other ethnic minority groups combined

• second, if an employer is not collecting information on employees in the specific White British category (or there are fewer than 10 employees in this category), they should report on the comparison between White employees and employees in the other groups combined

• finally, if an employer has fewer than 10 White British employees or White employees, they should report on the comparison between the largest ethnic group in the organisation and all other groups combined

Question 26:

Do you agree or disagree that all large employers should report ethnicity pay gap measures using one of the binary classifications as a minimum?

Question 27:

Do you agree or disagree that there should be at least 10 employees in each ethnic group being reported on? This would avoid disclosing information about individual employees.

Question 28:

Do you agree or disagree that employers should use the ONS guidance on ethnicity data to aggregate ethnic groups? This would help protect their employees’ confidentiality.

Question 29:

Is there anything else you want to tell us about ethnicity pay gap reporting?

Read more about how to respond.

Disability: data collection and calculations

Comparing pay across employee groups

Previous work on disability workforce reporting (see Annex B), together with early engagement with academics, employers and civil society organisations, has identified 2 approaches to calculating the disability pay gap:

1. Measure the difference in pay between disabled employees and non-disabled employees – we call this a ‘binary approach’.

2. Measure the difference in pay between employees with different impairment types and non-disabled employees. 

Some respondents supported reporting on impairment types, for example by using the GSS impairment harmonised standard, however there are some significant risks to such an approach if applied to pay gap or workforce reporting. These include the risk of individuals becoming identifiable, and greater complexity in calculations where people have multiple impairments. These issues could significantly affect compliance and the overall effectiveness of pay gap reporting. This has to be weighed up against the advantage of using the impairment type approach, which is that, if the data issues could be overcome, it would allow for a more detailed understanding of which groups of disabled people are most impacted by pay gap issues. The benefit of a binary approach is that it lowers the risk of identifying individuals from the data. A simpler, binary approach should also be easier for employers to implement and enable greater compliance. 

As such, we propose taking a binary approach, measuring the disability pay gap by comparing the pay of disabled employees with non-disabled employees.

The government proposes using the Equality Act 2010 definition of ‘disability’ as the basis of identifying disabled employees. This ensures a consistent definition of ‘disability’ is used across equality-related measures. We are interested in your views on this proposal.

Under the Equality Act 2010, a person is disabled if they have a physical or a mental condition that has a substantial and long-term impact on their ability to do normal day to day activities. Under the Equality Act, certain medical conditions are deemed automatically to be disabilities. In these cases a person may be disabled even if they are currently able to carry out normal day-to-day activities. People with a progressive condition are protected as soon as they are diagnosed. For more information, please see the EHRC website.

Employers will be responsible for collecting data on disability according to the Equality Act 2010 definition. Employees will continue to report disability themselves, and will not be required by law to identify or disclose disability to their employers as a result of introducing disability pay gap reporting. 

Question 30:

Do you agree or disagree with using the ‘binary’ approach (comparing the pay of disabled and non-disabled employees) to report disability pay gap data?

Question 31:

Do you have any feedback on our proposal to use the Equality Act 2010 definition of ‘disability’ for pay gap reporting?

Read more about how to respond.

To protect the privacy of employees (in line with GDPR) and to ensure data is statistically robust, we propose that there should be a minimum of 10 employees in each group being compared in terms of pay. 

Question 32:

Do you agree or disagree that there should be at least 10 employees in each group being compared (for example, disabled and non-disabled employees)? This would avoid disclosing information about individual employees.

Question 33:

Is there anything else you want to tell us about disability pay gap reporting?

Read more about how to respond.

About this consultation and how to respond

Enquiries

Postal address:

Race Equality Unit

Cabinet Office

1 Horse Guards Road

London

SW1A 2HQ

Email: equalitybill@cabinetoffice.gov.uk

How to respond

We encourage you to respond online if possible.

Please read the consultation document.

Then submit your responses online: Equality (Race and Disability) Bill consultation survey 

Please email equalitybill@cabinetoffice.gov.uk if:

• you would like to respond via email
• you have any other enquiries specifically relating to this consultation including requests for the document in an alternative format

If you would like to respond by post, please mark your correspondence ‘Equality Bill consultation response’ and send it to the postal address.

Providing more than one response

You can provide more than one response to the consultation. For example, if you are a trade union organisation, you might provide two separate responses – one response as a representative organisation and one response as an employer. Alternatively, if you are an individual representing an organisation or network, you may want to complete one response on behalf of your organisation and another response reflecting your own personal views. 

If you have any complaints or comments about the consultation process you should contact the Cabinet Office. 

Extra copies and alternative formats

Alternative formats of this consultation are available online. This includes:

• BSL 
• Welsh Translation
• Easy Read
• Large print
• Web accessible PDF and HTML

Please contact us for paper copies or alternative formats of this consultation document.

Braille and audio versions are also available on request. 

Requests for alternative formats can be made via post, email or telephone at 0808 175 6420

1. Although the pay gap reporting requirements will only apply across England, Scotland and Wales (and potentially England only for public bodies), employers in Northern Ireland may be subject to the requirements if they have 250 or more employees based in Great Britain.   ↩