Equality and equal pay

Employers with 250 employees or more will be required to develop and publish equality action plans relating to gender equality - addressing the gender pay gap and dealing with supporting employees through the menopause. An amendment to the Bill proposed at Committee stage also proposes adding "menstrual problems and menstrual disorders" as matters related to equality for these purposes. 

Implementation Status

• Part of Employment Rights Bill.
• Consultation on regulations setting out the details of this proposal will take place.
• "The majority of reforms will take effect no earlier than 2026".
• The government has also committed to develop menopause guidance for employers which will be progressed outside the Bill. 
   

Action

• Many employers are already producing and publishing gender pay gap action plans; employers should ensure that the steps they are taking comply with the new statutory obligation when it is in force.

• We are increasingly seeing employers tackling menopause in the workplace through policies, training and support groups. Steps being taken in relation to menopause should be reviewed and further steps identified in preparation for the new reporting duty.

• Ensure that any data protection required complies with wider legislative, regulatory and data protection requirements. 

In detail

• Employers with 250 employees or more will be required to develop and publish equality action plans setting out the steps they are taking in relation to "prescribed matters related to gender equality and to publish prescribed information relating to their plans". Prescribed matters will include addressing the gender pay gap and supporting employees going through the menopause.

• Regulations may make provision about:

  • The content of employers' gender action plans.

  • The form and manner in which the plan on information is to be published;

  • When and how frequently the plan or information is to be published or revised.

  • Requirements for senior approval before a plan or information is published.

  • Descriptions of employers, employees and information.

• The government's intention is that the gender pay gap reporting service will "include a list of actions and employers will be asked to identify which they are enlisting. The list will be based on international evidence showing them to be effective or considered best practice. Employers will then be encouraged to provide further detail about the actions taken on their own website."

• After the first publication of an employer's gender action plan, it will not be required to publish information more frequently than every 12 months.

• Regulations may set out how a failure to comply will be enforced. The Next Steps paper states that a Regulatory Enforcement Unit will be set up to deal with enforcement; it is anticipated that this will be dealt with in the forthcoming Equality (Race and Disability) Bill. 

Impact

• At present employers with 250 or more employees are required to report via the government portal gender pay gap figures. Many employers also publish supporting narratives and action plans setting out measures they are taking to close the gap.

• The government has only indicated that it is currently focusing on gender pay and menopause. We may however see regulations introduced in the future covering other "gender equality" matters.

• The government's commitment to menopause support is highlighted in its recent appointment of a new Menopause Employment Ambassador to work closely with employers to improve workplace support for women navigating menopause, helping them stay in work and progress their careers. It has been reported that almost 70% of employed women aged 40-60 report menopausal symptoms having a negative effect on their work, with over 50% unable to go into work at some point due symptoms.                                                                                                                                                                 

The government will require employers with more than 250 staff to report on their ethnicity and disability pay gaps.

Implementation Status

• Part of the Draft Equality (Race and Disability) Bill – to be published during the current parliamentary session for pre-legislative scrutiny.
• Consultation published on how this will be implemented. Closes 10 June 2025.
   

Action

• Employers who do not already report on ethnicity or disability pay gaps should start considering what steps they may need to take to prepare for this new legal reporting requirement, and how data will be collected in line with existing statutory and data protection requirements.
• The current voluntary guidance on ethnicity pay gap reporting provides a tool for employers to understand each stage of the process but also the specific complexities that ethnicity pay reporting brings. Disability pay gap reporting is likely to bring similar complexities.
• Employers may also want to take the opportunity to address other potential pay inequalities existing within their organisation; for example, we are starting to see some employers reporting voluntarily on their socioeconomic pay gaps.
• The government has indicated that it will be taking forward other measures to support disabled workers into and staying in employment; the government will shortly publish its Get Britain Working white paper.
   

In detail

• As part of its proposed draft Equality (Race and Disability) Bill, the government has opened a consultation to seek views on how to implement mandatory ethnicity and disability pay gap reporting for large employers (more than 250 employees) in Great Britain, with changes likely to be implemented in 2026. At present, employers with more than 250 employees are only under a statutory duty to report on their gender pay gaps, although the previous government did issue guidance on ethnicity pay gap reporting on a voluntary basis.

• To minimise additional burdens on businesses, the government is aiming to use a similar framework for ethnicity and disability reporting to that already in place for gender pay gap reporting. For the relevant protected characteristic, employers would report on mean and medial differences in average hourly pay and bonus pay and the percentage of employees in four equally sized groups ranked from highest to lowest hourly pay and the percentage of employees receiving bonus pay for the relevant protected characteristic. A "snapshot" date of 5 April and reporting date of 4 April would likewise be used, with online reporting mirroring that via the gender pay gap reporting service.

• To give context to an employer's ethnicity and disability pay gap figures, the government is also proposing to make it mandatory for employers to report on the overall breakdown of their workforce by ethnicity and disability and the percentage of employees who did not disclose their personal data on ethnicity and disability. This seeks to overcome disparities which may otherwise arise where there are low self-declaration rates from their employees on these characteristics or where an employer 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.

Data collection and analysis

• The consultation recognises the distinct considerations that arise when collecting and analysing data on ethnicity and disability, compared to gender. The government is seeking views on the best approach.

• The government proposes that for ethnicity, employees will be asked to report their own ethnicity with an opt out of "prefer not to say"; ethnicity data will be collected using the detailed ethnicity classifications in the Government Statistical Service ethnicity harmonised standard that was issued for the 2021 census. While employers will be encouraged to try to show pay gap measures for as many ethnic groups as they can, to protect the privacy of employees and help produce statistically robust data, it is proposed that there should be a minimum of 10 employees in any ethnic group that is analysed. It may be that some ethnic groups can be added together for this purpose in line with guidance on ethnicity data from the Office of National Statistics. The government recognises however that "binary reporting" (such as comparing white British employees with ethnic minority employees) may be the only available comparison; where this is so, employers should keep this under review and aim towards reporting on more ethnic groups in the future.

• For disability, the government again proposes that employees will be asked to report their own disability, using the Equality Act 2010 definition of "disability" for this purpose. In contrast to ethnicity, the government is proposing taking a binary approach to measuring the disability pay gap by comparing the pay of disabled employees with non-disabled employees given the significant data protection risks and complexities that could arise if analysing by impairment type. Again, to protect the privacy of employees (in line with GDPR) and to ensure data is statistically robust, it is proposed that there should be a minimum of 10 employees in each group being compared in terms of pay.

• The consultation will run for 12 weeks, closing on 10 June 2025.

Impact

• However, while the government has sought to mitigate in its proposals the complexities that can arise when collating and analysing data on these protected characteristics, employers should start considering carefully how they will manage the new statutory requirements from a legal and practical perspective and the inherent risks that it will inevitably give rise to.

• The usefulness of the new reporting obligations for employers in understanding any inherent inequalities existing within their workforce will naturally be dependent on the volume and accuracy of data collected; it will also be important to understand the limitations of the data available and the impact this has on the reporting required. For example, the binary approach to disability pay reporting currently suggested may lead to distortions, given the inevitably wide scope of conditions falling within the Equality Act 2010 definition of disability (for example, individuals with a range of physical and mental health conditions may meet the definition, with some conditions automatically deemed to be disabilities, as well as those who are neurodivergent) and the different impacts different disabilities have on day-to-day work. Employers will need to consider carefully how this is approached with employees, ensuring that appropriate safeguards are in place and that employees understand the new pay reporting obligations.

• The government's hope is that introducing mandatory ethnicity and disability pay gap reporting will "provide the same transparency and impetus for positive change for people from different ethnic groups and disabled people" as with gender pay reporting and while the new reporting duties will only apply to those with 250 plus employees, this is an area which all employers should have on their radar. The consultation document is "the beginning of the process" and that the government will be engaging further with interested groups, as well as 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.

• These proposals are likely to be subject to extensive consultation and detailed regulations.

• The benefits diversity and inclusion brings to an organisation are well recognised; the previous government published guidance providing for voluntary ethnicity pay reporting recognising that "there is still more to be done to remove barriers to entering the labour market and to ensure pay and progression in the workplace is fair for all ethnic groups" and that "ethnicity pay reporting is one of the tools employers can use to build transparency and trust among their employees"

• In November 2018 the previous government published a voluntary framework to encourage businesses to report how many of their staff have a disability or health condition and their health and wellbeing.