Series
Blogs
Mandatory ethnicity and disability pay gap reporting: Government publishes its consultation response
Mandatory ethnicity and disability pay gap reporting: Government publishes its consultation response
25 March 2026
Series
Blogs
25 March 2026
On 25 March 2026, the government published its long-awaited response to the consultation on mandatory ethnicity and disability pay gap reporting — and it has, as widely anticipated, reaffirmed its commitment to introducing mandatory reporting in both areas. The consultation response not only confirms the government's intention to legislate but also sets out the key policy decisions it has reached on how the new regime will work in practice.
This is a significant development for large employers in the UK. Below, we set out the key points that organisations need to understand.
The consultation was launched in March 2025 as part of the government's wider programme of equality reform, sitting alongside the promised Equality (Race and Disability) Bill (which is still awaited). The consultation sought views on how to implement mandatory ethnicity and disability pay gap reporting for large employers, with the government having made clear that mandatory reporting in this area was a manifesto commitment.
One of the clearest themes in the consultation response is the government's intention to align the new ethnicity and disability pay gap reporting regime as closely as possible with the existing mandatory gender pay gap reporting framework. This approach reflects the strong appetite among employers for a coherent and consistent system.
In particular, the government has confirmed that the new regime will:
This is a sensible and pragmatic approach. Employers who are already well-versed in gender pay gap compliance will find much that is familiar, even if the practical challenges of collecting ethnicity and disability data are, as we discuss below, more complex.
A significant majority of consultation respondents agreed that large employers should not only be required to report their ethnicity and disability pay gaps but should also be required to publish action plans to tackle the causes of any gaps identified. The government has confirmed that it will mandate action plans.
Importantly, this will be aligned with the new requirements already in train for large employers to produce an action plan covering steps to reduce the gender pay gap and to support employees going through the menopause (read more about this in our blog post here). The government's intention is to harmonise the action plan system, so that employers only need to produce and publish a single action plan covering all areas.
The new regime will require employers to report declaration rates — i.e. the percentage of employees who did not state their ethnicity or disability status. This is an important feature of the framework. High non-declaration rates can significantly affect the reliability of pay gap data, and requiring employers to publish declaration rates will allow both employers and the public to contextualise the pay gap figures reported. It also creates an incentive for employers to actively improve data collection and employee engagement on diversity monitoring.
Data collection: Employers will be required to collect ethnicity data using the ethnicity classifications set out in the Government Statistical Service's (GSS) harmonised ethnicity standard, aggregated in line with guidance from the Office for National Statistics (ONS). This was the approach suggested in the initial consultation and will ensure consistency and comparability of data across employers.
Reporting: Ethnicity pay gaps must be reported with, at a minimum, a binary comparison — comparing the pay of those in the White (including White Other) group against all other ethnic groups combined. A minimum of 10 employees must be in each group for a comparison to be reported.
In addition, employers will be required to report comparisons between five broad ethnic groups (White; Asian or Asian British; Black, Black British, Caribbean or African; mixed or multiple ethnic groups; and other ethnic groups), again subject to meeting the minimum threshold of 10 employees in each group.
For disability pay gap reporting, the government has confirmed a binary approach — comparing the pay of disabled and non-disabled employees. Disability will be defined using the Equality Act 2010 definition, which requires an individual to have a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities.
As with ethnicity reporting, a minimum of 10 employees in each group will be required before a comparison must be reported.
The government has also noted that it will "future proof" the legislation to allow for more granular disability reporting in due course, if this becomes appropriate. This suggests the framework may evolve over time as data collection practices and workforce monitoring improve across industries.
The government will introduce the new mandatory reporting requirements through primary legislation — specifically the forthcoming Equality (Race and Disability) Bill. The detailed reporting requirements will then be set out in supporting secondary legislation (regulations). Notably, the consultation response already includes the draft implementing legislation annexed to it, which is an encouraging sign of the government's preparedness to move quickly.
Guidance and practical tools: The government has also committed to developing a suite of guidance and practical tools to support employers with the new regime. This will include:
At this stage, the consultation response does not specify when the new mandatory regime will take effect. The government must first introduce and pass the Equality (Race and Disability) Bill through Parliament — a process that will involve significant legislative scrutiny.
Given that the draft legislation is already annexed to the consultation response, there is clearly political will to progress at pace — but employers should not assume that this regime is imminent. As a working assumption, mandatory reporting is unlikely to be required before 2027 at the earliest, and is likely to be later (depending on the Parliamentary timetable).
Even though mandatory reporting is not yet in force, employers may want to consider taking preparatory steps sooner. There is a great deal of groundwork to be done, and those who start early will be far better placed when the legal obligations eventually land.
Collecting high-quality ethnicity and disability data — and achieving meaningful declaration rates — requires sustained effort and a culture of trust and inclusion. The employers that invest in this work now will not only be best placed to comply with the new requirements when they are in force but may also derive real organisational benefit from a deeper understanding of their workforce.
We will continue to provide updates as the legislation develops. If you have any questions about how these changes might affect your organisation, please do not hesitate to get in touch with the Linklaters Employment & Incentives team.