On 25 March 2026, the government published its Response to the consultation on mandatory ethnicity and disability pay gap reporting, setting out the main findings and policy decisions. The consultation sought views on the proposed approach with the aim for responses to help shape the draft Equality (Race and Disability) Bill (see FC Feature 18 March 2025). Alongside the Response, the government published a Regulatory Impact Assessment and a Report produced by Explain Market Research Ltd that independently analysed the responses.
Following the consultation, the government confirmed its commitment to introducing mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees and set out its intended approach, which includes the following (Written Statement).
- Calculations – the government intends to require employers to report on the same six metrics currently used for gender pay gap reporting (see Gender pay gap reporting, Q&A here). The geographical scope will mirror that of gender pay gap reporting.
- Data collection – in relation to ethnicity, a minimum of a binary comparison will be required. Where possible, employers will be required to aggregate to five ethnic groups. In relation to disability, employers will be required to report a binary comparison, using the Equality Act 2010 definition of disability (see Disability, Q&A here). There will be a minimum threshold for employees in each group, to protect anonymity, in respect of both ethnicity and disability. The thresholds are still to be determined.
- Workforce reporting and declaration rates – there will be requirements to report the breakdown of the workforce by ethnicity and disability status ('workforce reporting') and the proportion of employees who did not share their ethnicity or disability status ('declaration rate').
- Dates, deadlines and enforcement – the same 'snapshot dates' for collecting information, reporting dates and online service as for gender pay gap reporting will be used. Enforcement will mirror gender pay gap reporting.
- Action plans – the government intends to introduce a requirement for employers to publish action plans to tackle any ethnicity and disability pay gaps. This will be aligned with the new requirements to produce an action plan covering steps to reduce the gender pay gap and support employees going through menopause under the Employment Rights Act 2025 (see ERA 2025: Desktop, Q&A here). Once all the requirements are in force, employers will be able to produce a single equality action plan.
- Public bodies – the government will not be mandating additional reporting requirements for public bodies as proposed in the consultation. These would have required more detailed pay gap comparisons by grade or salary band, and information on recruitment, retention and progression. Public bodies will instead be encouraged to provide this voluntarily.
Draft clauses are included in Annex A which indicate how the primary legislation may work in practice. The government will work to develop supporting regulations that will set out the more detailed reporting requirements. Guidance and practice tools will be produced including: (i) step-by-step guidance on collecting data and calculating the pay gap; (ii) guidance on improving declaration rates; and (iii) advice on actions to address the ethnicity and disability pay gaps.
First published on the Employment News Service on 26 March 2026
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