Equality (Race and Disability) Bill: Preparing for mandatory pay gap reporting 

The Equality (Race and Disability) Bill, a key piece of legislation in the UK government’s equality agenda, promises to revolutionise how organisations approach diversity and inclusion reporting. Currently at the draft stage, the new labour law is set to introduce a significant shift in reporting requirements for HR professionals.  

In this blog

Current state of pay gap reporting

What’s coming: The Equality (Race and Disability) Bill 

Key actions for HR professionals 

Conclusion and key takeaways

Current state of pay gap reporting 

Currently, it’s only mandatory for UK employers with 250 or more employees to report their gender pay gap each year. Ethnicity and disability pay gap reporting are currently voluntary, and while there is some guidance available around ethnicity reporting, disability reporting guidance remains elusive. However, this landscape is set to change dramatically in the coming years. 

What’s coming: The Equality (Race and Disability) Bill 

The Labour government has indicated that mandatory ethnicity and disability pay gap reporting will become a legal requirement for larger employers. According to recent parliamentary statements, these expanded reporting requirements will “build on the historic achievements of the Equal Pay Act 1970 and Equality Act 2010”. 

The bill will introduce mandatory ethnicity and disability pay gap reporting for organisations with more than 250 employees, mirroring the successful gender pay gap reporting framework that has helped highlight pay disparities in a significant expansion of the UK’s equality framework. 

Additionally, the employment law changes will extend the right to make equal pay claims to ethnic minority and disabled workers, while establishing an Equal Pay Regulatory and Enforcement Unit to improve enforcement mechanisms. 

Timeline and expectations 

While the exact timeline remains uncertain, HR professionals should expect these changes within the next four years. The bill was one of 40 pieces of legislation proposed in 2024, though it has yet to be formally drafted as the scope and detail of reporting requirements are still being developed. 

What categories could be required for ethnicity reporting? 

Though scarce, the currently available guidelines for organisations choosing to report on ethnicity pay disparity voluntarily may offer some insight into what will be expected when mandatory ethnicity pay reporting takes effect. 

Organisations can currently choose between: 

• Five broad ONS categories: Asian/Asian British, Black/Black British/Caribbean/African, Mixed or multiple ethnic groups, White, Other ethnic group 

• Nineteen detailed categories: Providing more granular insights but requiring larger sample sizes 

Many organisations report internally using the detailed categories while publishing external reports containing the broader classifications to balance insight with privacy protection. 

What categories could be required for disability deporting? 

Currently, there’s no formal guidance for disability pay gap reporting. Organisations should consider: 

• Binary disabled vs non-disabled reporting 

• Potential separation of neurodiversity from other disabilities 

• Clear communication about the Equality Act 2010 definition of disability 

What metrics could be required? 

Based on existing guidelines surrounding voluntary ethnicity reporting and the metrics required for gender pay gap reporting, it may be worth preparing to report on: 

• Percentage of each ethnic group in each hourly pay quarter 

• Mean and median ethnicity pay gaps using hourly pay 

• Percentages of employees in different ethnic groups 

• Percentage of employees who didn’t disclose their ethnicity 

• Optional: Bonus pay gap analysis 

Key actions for HR professionals 

While mandatory ethnicity and disability reporting may be some time away yet, it’s highly likely to be in place within the next few years. So, start planning now to ensure a smooth transition and avoid a last-minute rush when it comes with these steps: 

Executive buy-In and Resource Planning 

Successful implementation begins with securing executive support. Leaders must understand that meaningful pay gap reporting requires significant investment in both technology and process changes. Budget considerations should include potential upgrades to HR and payroll systems to capture and analyse the required data effectively. 

Employee engagement 

Maintain transparency throughout – be clear about why you’re collecting data and how it will be used. Explain clearly what terms like “ethnicity” and “disability” mean in the context of reporting. 

Review data policies 

To encourage employees to share their data and improve the accuracy of your reports, communicate clearly how the data is used and share data access control policies to build trust. 

System evaluation 

Assess whether your current HR and payroll systems can capture and report the required data. For Zellis customers, we can support with equal pay reporting. 

Review job categories 

Ensure your role classifications support meaningful analysis. 

Consider broader benefits 

Use this as an opportunity to strengthen your employer brand and attract diverse talent. 

Cybill Watkins, Product Legislation Manager for Zellis Group, summarises: 

“As we approach significant legislative change, proactive businesses are already preparing for mandatory ethnicity and disability pay gap reporting. While timelines remain fluid, the direction is clear—transparency will become the hallmark of equitable employers. Success hinges not just on compliance, but on meaningful employee engagement and data integrity. Companies that embrace these changes now, with executive buy-in and thoughtful implementation, will transform regulatory requirements into powerful tools for workplace equity and talent attraction.”   

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Conclusion: Start preparations now to lead the change 

The Equality (Race and Disability) Bill represents more than just additional reporting requirements—it’s an opportunity to drive meaningful change in workplace equality. By preparing now, HR professionals can turn compliance into competitive advantage, creating more inclusive workplaces that attract and retain the best talent. 

While the exact requirements are still being developed, starting your journey now will position your organisation ahead of the curve. The future of business reporting is expanding beyond gender, and those who embrace this change early will be best placed to create truly equitable workplaces. 

The question isn’t whether these changes are coming—it’s whether your organisation will be ready to lead the way in creating a more equal future of work. 

Key takeaways

• Mandatory ethnicity and disability pay gap reporting is highly likely to come into effect by 2029. 
• Early preparation is key – start now to identify challenges and establish processes ready for smooth reporting. 
• Executive support is crucial to ensure infrastructure is in place in time.  
• Clear employee communication will lead to higher quality of data and more accurate reporting. 

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Join the webinar: Expert insights on pay gap legislation 

Join Cybill Watkins, Product Legislation Manager, and Bella Jones, Head of Sustainability & Impact, on Wednesday 18^th June for a webinar covering recent ethnicity and disability reporting updates. They’ll be discussing key changes and business implications, then answering your questions.