The government has confirmed plans to introduce mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees, following strong support in its 2025 consultation 

 CREDIT: This is an edited version of an article that originally appeared on Farrer.co.uk 

The aim is to increase transparency, highlight pay disparities and encourage action to remove barriers affecting minoritised ethnic and disabled employees. While the detail is still being finalised, businesses should assume this will become a formal requirement in the coming years. 

Who Will Be Affected? 

The requirements will apply to “large employers” with 250+ employees, including: 

• Private and voluntary sector employers in England, Wales and Scotland  

• Public sector bodies in England  

• Certain public authorities in Great Britain (non-devolved functions)  

Smaller businesses will not be required to report but may choose to do so voluntarily. For workplace technology dealers, this means most SMEs will not be directly in scope – but larger dealers, distributors and multi-site organisations may be. 

What Will Need to Be Reported? 

The reporting framework will broadly mirror gender pay gap reporting and include: 

• Mean and median hourly pay gaps  

• Pay quartiles (how staff are distributed across pay bands)  

• Mean and median bonus gaps  

• Percentage of employees receiving bonuses  

In addition, employers must report workforce breakdowns by ethnicity and disability status, along with declaration rates (how many employees choose not to disclose this information). This context is intended to improve understanding of the data and encourage more accurate workforce reporting. 

Employers will also need to produce action plans explaining how they will address any identified pay gaps. These can be combined with existing gender pay gap reporting requirements, reducing duplication for HR teams. 

How Employers Should Prepare 

Although no start date has been confirmed, employers are being encouraged to prepare early. For dealers and wider workplace suppliers, this is particularly relevant where internal HR systems, payroll tools or customer organisations may need to adapt. 

Key preparation areas include: 

• Reviewing HR and payroll data systems to ensure they can capture ethnicity and disability data securely  

• Improving employee trust and encouraging voluntary disclosure  

• Testing pay gap calculations using existing data  

• Reviewing policies to identify potential barriers affecting inclusion and progression  

• Aligning reporting processes with existing gender pay gap reporting cycles  

Why This Matters for Dealers 

While this is primarily an HR and compliance issue, it has indirect implications for workplace dealers supporting larger organisations. Businesses will increasingly rely on accurate, secure and well-integrated data systems to meet reporting obligations. For smaller dealers, it also signals a growing demand from customers for technology that supports compliance, reporting and workforce insight – even where they are not directly required to report. 

There is currently no confirmed implementation date, but legislation has been published and guidance is expected ahead of rollout. Employers should expect a phased introduction over the coming years.