Featured in People Management
The UK government has confirmed the consultation process is back underway to introduce mandatory ethnicity and disability pay gap reporting for large employers, which if agreed will be another significant shift in how organisations will be expected to understand and communicate pay equity.
The announcement, made by the Office for Equality and Opportunity on 25 March 2026, builds on existing gender pay gap reporting requirements and signals a broader move toward greater transparency in reward practices.
Gemma Bullivant, executive coach and reward strategist, shared her perspective with People Management on what this change means in practice and how organisations should be thinking about their next steps.
A familiar direction, but significant work ahead
For many HR leaders, this development will not come as a surprise. As Gemma explains:
“This has been on the horizon for some time, so it will not come as a surprise to most HR leaders. However, many organisations will still have a significant amount of work to do to be ready, particularly around the quality of their data, the strength of their reward frameworks, and how this fits with their wider approach to pay transparency.”
While the legislation itself introduces new reporting requirements, the real challenge lies in whether organisations have the underlying structures in place to support meaningful analysis and action.
The intention behind the legislation to improve transparency and accountability.
“In principle, greater reporting should improve transparency and accountability, helping employers identify structural issues that might otherwise remain hidden.”
However, Gemma highlights an important distinction.
“Reporting alone will not drive change unless organisations are prepared to look closely at the decisions and processes behind the numbers.”
This reflects a broader pattern seen with gender pay gap reporting, where data visibility does not automatically translate into organisational change. Without deeper analysis of how pay decisions are made, reported gaps risk becoming descriptive rather than transformative.
The data challenge
One of the most immediate areas of focus for HR teams will be data.
“HR teams should be reviewing what data they currently collect, how reliable it is, and whether employees feel confident sharing it.”
Unlike gender data, ethnicity and disability data often comes with additional complexity. Disclosure rates can be inconsistent, and employees may be hesitant to share sensitive information.
This places an added responsibility on organisations to build confidence in how data is collected, used and protected, ensuring that employees understand both the purpose and value of disclosure.
A key risk is that organisations treat this as another reporting requirement to be managed rather than an opportunity to strengthen their overall approach to reward.
“This should not become a compliance-only exercise. Pay gap reporting has most value when linked to a clear reward strategy, defined pay structures and a coherent EDI agenda.”
When reporting is connected to a broader reward strategy, it can help organisations identify inconsistencies, strengthen decision making and create a more transparent and equitable employee experience.
Without that connection, it risks becoming a standalone activity with limited impact.
While Gemma supports the intent behind the legislation, she also acknowledges the practical implications for organisations.
For many organisations, this will require investment in data systems, governance, communication and leadership capability, particularly in ensuring that managers are equipped to understand and explain pay decisions.
Gemma advice for HR teams is to link this to a clear reward strategy
As with gender pay gap reporting, the introduction of ethnicity and disability reporting would act as both a mirror and a catalyst.
It will highlight where structural issues exist, but it will also require organisations to decide how seriously they want to address them.
For HR and leadership teams, the opportunity is not to just comply with any proposed new requirements, but to strengthen the consistency and credibility of their overall reward approach.
If you would like support reviewing how your reward structures align with evolving transparency requirements, feel free to get in touch.
