Ethnicity and Disability Pay Gap Reporting: What UK Employers Need to Know in 2026

UK employers with 250 or more staff face new mandatory pay gap reporting obligations under the proposed Equality (Race and Disability) Bill. Here’s everything HR leaders need to know — including what to report, key deadlines, and how to prepare your organisation now.

What Is the Equality (Race and Disability) Bill?

The Equality (Race and Disability) Bill is proposed UK legislation that will require large employers to measure and publish their ethnicity pay gap and disability pay gap. In March 2026, the UK government confirmed it will legislate following a public consultation, setting out a clear framework modelled on the existing gender pay gap reporting regime.

The Bill is expected to apply to employers with 250 or more employees in Great Britain.

Who Does Ethnicity and Disability Pay Gap Reporting Apply To?

The reporting requirement will apply to private, public, and voluntary sector employers with 250 or more employees. This threshold mirrors the existing gender pay gap reporting rules, meaning most organisations already subject to those rules will fall within scope.

Smaller employers are not currently required to report, though early voluntary action is encouraged.

What Will Employers Be Required to Report?

Organisations in scope will need to publish the following six standard metrics:

1. Mean ethnicity pay gap and mean disability pay gap
2. Median ethnicity pay gap and median disability pay gap
3. Mean bonus gap by ethnicity and disability
4. Median bonus gap by ethnicity and disability
5. Pay quartile distribution — the proportion of ethnic minority and disabled employees in each pay quartile
6. Workforce composition — including the percentage of employees who have not disclosed their ethnicity or disability status

The declaration rate metric is significant. High non-disclosure rates can undermine the reliability of reported figures, so encouraging employee self-declaration is a key part of preparation.

What Is the Difference Between a Pay Gap and Equal Pay?

This is one of the most frequently misunderstood areas of workplace equality law, and one that HR professionals are best placed to clarify.

Equal pay is a legal right under the Equality Act 2010. It requires employers to pay men and women — and, by extension, workers across protected characteristics — the same rate for the same work or work of equal value.

A pay gap is a workforce-wide metric. It measures the difference in average earnings between two groups across an entire organisation — regardless of job role or seniority. An employer can be fully compliant with equal pay law and still report a significant ethnicity or disability pay gap, if certain groups are disproportionately concentrated in lower-paid or lower-grade roles.

Example: A pay audit of organisations within the Greater London Authority revealed a 37% ethnicity pay gap. Analysis showed this was not the result of unequal pay for the same work, but of ethnic minority employees being concentrated in lower pay bands. That kind of structural pattern is precisely what mandatory reporting is designed to surface — and address.

What Is the Legal Context?

Pay inequality in the UK has significant legal and financial consequences. Under the Equality Act 2010 (which incorporated the Equal Pay Act 1970), employees can bring equal pay claims to an employment tribunal, with successful claimants able to recover up to six years of pay arrears in England and Wales (five years in Scotland).

High-profile equal pay cases — including claims against Birmingham City Council, Asda, and Glasgow City Council — demonstrate the scale of financial and reputational risk when pay disparities go unaddressed.

The Equality (Race and Disability) Bill extends this accountability framework from individual claims to systemic, organisation-wide reporting.

Will There Be Penalties for Non-Compliance?

Enforcement mechanisms are expected to accompany the reporting requirements. The newly established Fair Work Agency is anticipated to play a central role in investigating pay disparity claims and holding employers to account.

Penalties for failing to report — or for submitting inaccurate data — are under active consideration. As with gender pay gap reporting, non-compliance is also likely to carry significant reputational risk, particularly as investors, job seekers, and clients increasingly scrutinise employer equality data.

Frequently Asked Questions

When will ethnicity and disability pay gap reporting become mandatory? The government confirmed in March 2026 that it will legislate. Exact commencement dates will be set out in the regulations, which are expected to follow the Bill’s passage through Parliament.

Does a pay gap prove discrimination? No. A pay gap indicates a difference in average earnings across a workforce, not that any individual has been paid unfairly. However, a significant or persistent gap may indicate structural barriers that employers are expected to investigate and address.

What if employees won’t disclose their ethnicity or disability? Employers will be required to report the proportion of employees who have not disclosed this data. Encouraging disclosure through clear communication, psychological safety, and robust data governance is essential preparation.

Does this apply to Scotland and Wales? Yes. The Bill covers Great Britain — England, Scotland, and Wales. Northern Ireland has separate employment legislation.

How Should Organisations Prepare Now?

Waiting for the regulations to be finalised before acting puts organisations at a disadvantage. The most effective preparation starts well in advance. Key steps include:

Audit your data infrastructure. Assess whether your HR systems can capture, store, and process ethnicity and disability data accurately and securely. Many organisations discover significant gaps when they first attempt to run pay gap calculations.

Drive employee self-declaration. Without reliable data from employees, reporting will be incomplete. Build a communication strategy that explains how data is used, who can see it, and why disclosure benefits the workforce.

Train your managers and HR teams. Line managers play a critical role in creating the psychological safety needed for disclosure, and in understanding what pay gap data means — and doesn’t mean. E-learning is an efficient, scalable way to build this capability across your organisation.

Develop an action plan. Reporting a gap without a credible plan to address it will satisfy the letter but not the spirit of the law — and is unlikely to satisfy regulators, employees, or the public. Begin mapping the structural factors behind any disparities now.

How PeopleFirstHR Can Help.

Through our partnership with VinciWorks, we provide e-learning through the Astute platform designed to help organisations prepare for the Equality (Race and Disability) Bill. Our training covers:

• Understanding ethnicity and disability pay gap reporting requirements
• The difference between equal pay and pay gap metrics
• How to encourage employee self-declaration
• Equipping managers to discuss pay equity with confidence
• Building a culture of transparency and inclusion

Whether you’re starting from scratch or strengthening existing equality frameworks, we can help you deliver the right training to the right people — at the right time.