An employer's guide to Equality Action Plans and Ethnicity and Disability Pay Gap Reporting
Already buckling under the weight of new employment law requirements imposed by the Employment Rights Act 2025, employers with 250 employees or more will need to publish equality action plans on a mandatory basis from April 2027. The government has also confirmed that in due course those employers will be required to report on ethnicity and disability pay gaps.
Below is a series of Q&As explaining how to comply with the new requirements on action plans in line with published government guidance and covering the proposed details of the disability and ethnicity pay gap reporting regime.
If you have any questions about compliance, please contact Crowley Woodford, Ruth Buchanan, Dan Ornstein or your usual Ashurst contact.
Equality Action Plans
What do employers need to know?
From 2027, it will be mandatory for employers with 250 or more employees to publish equality action plans covering the actions that will be taken to address the gender pay gap and support employees going through the menopause in their organisation. The purpose of the action plans is to support employers to take effective action to improve workplace gender equality between male and female employees.
Which employers must publish an equality action plan?
Current guidance does not set out how the 250 or more threshold will be assessed but assuming the same rules apply as to gender pay gap reporting, individual employers with 250 or more employees will need to publish equality action plans. This means groups where each member company has fewer than 250 employees will not be required to publish a plan at all. Conversely, groups where more than one member has at least 250 employees will need to publish multiple individual plans.
When will these changes come into force?
Equality action plans are optional from 6 April 2026 and mandatory as of Spring 2027. Voluntary action plans can be uploaded at any time during the reporting year, with a deadline 4 April 2027 for private and voluntary sector employers which is the same deadline as for gender pay gap reporting. Based on what we have seen to date, very few employers are publishing plans before they become mandatory. The deadlines for publishing mandatory action plans in Spring 2028 are likely to be the same as those which apply for gender pay gap reporting.
What should the equality action plan include?
The government has published a list of 18 recommended evidence-informed actions to include in the plan. Employers must choose at least one action to address their gender pay gap and one action to support employees experiencing the menopause, although the government recommends implementing more than two actions where possible. The recommended actions cover the following areas: recruiting staff; developing and promoting staff; building diversity into the organisation; increasing transparency; and supporting employees experiencing menopause.
Each recommended action has detailed guidance on the purpose and benefit of the action, and how to implement and track progress of the action. For example, to improve gender equality during recruitment processes, advertising leave policies (such as parental or carers leave) in job adverts is a recommended action as research shows that sharing this information may attract more applicants including carers and prospective parents. As for tracking progress of this action, the guidance suggests surveying staff or applicants to find out if knowing about leave policies influenced their decision to apply.
The recommended actions for supporting employees experiencing menopause include setting up menopause support groups and networks, training managers to support employees experiencing menopause and reviewing policies and procedures to meet the needs of employees experiencing menopause.
The Government's summary guidance for employers on creating an action plan can be found here.
How should employers implement an action plan?
The government's detailed guidance on the process for implementing an action plan covers the following steps:
- Step 1: Understanding the issues in your organisation: analyse workforce data to find the answers to certain questions: for example, what is the split of men and women at each pay level of the organisation? Talking to a wide range of staff, managers and employee groups will help to understand employees' needs and establish which actions could have the greatest impact.
- Step 2: Choosing your actions: having understood the issues in the organisation, choose at least one action to address the gender pay gap and one to support employees experiencing menopause. Actions will either be "new" or "in progress", or already embedded. An employer must choose two actions that are "new" or "in progress" and senior leaders will need to sign off on the chosen actions.
- Step 3: Writing a supporting narrative: when submitting an action plan, add (i) supporting text for each action about why the action was chosen and how it will be tracked and (ii) an overall supporting narrative of up to 200 words. This narrative will be published alongside the gender pay gap data. Further detail of up to 100 words can be added for embedded actions on how they were implemented and what the results have been.
- Step 4: Submitting your plan: action plans must be submitted to the gender pay gap service by a person with an account which is linked to the employer's account. See below for further details of who this person should be.
- Step 5: Tracking the outcomes of your actions: measure progress by (i) producing a set of metrics before starting an action and (ii) tracking changes after starting the action to assess if progress is happening in line with the organisation's objectives. Measuring at regular intervals, such as monthly or annually, will help compare outcomes over time. Organisations with the resources to do so are recommended to formally evaluate the action plan to establish why and how an action may or may not have worked.
- Step 6: Reviewing your plan: employers must (i) update the report annually ensuring there are always two "new" or "in progress" actions, (ii) complete interim reviews one and two years after submitting the plan and (iii) complete a detailed review by answering questions on the progress of each action three years after submitting the plan. Reviews will take place at the same time as submitting the gender pay gap figures.
Who will be responsible for the plan?
Employers in the private or voluntary sector will need to include the name of a 'responsible person' when submitting the action plan, which should usually be a director, partner or senior officer. This person will be responsible for confirming that the information submitted is accurate.
Where must action plans be published?
Action plans will be submitted and published on the gender pay gap service. Published action plans will be available to the public along with employers' gender pay gap data. Organisations may also publish their action plans on their websites.
What are the consequences of failing to submit an action plan?
Although it has not yet been confirmed what the consequences for employers of failing to submit an action plan will be, the Employment Rights Act 2025 gives the Secretary of State powers to bring into force regulations which determine this, and it is likely that organisations that fail to comply will face potential "naming and shaming" through a published list of non-compliant employers.
Ethnicity and disability pay gap reporting
What do employers need to know?
The government ran a public consultation in 2025 to seek views on the proposed approach to ethnicity and disability pay gap reporting. The outcome of the consultation is that the government intends to make ethnicity and disability pay gap reporting mandatory for employers with 250 or more employees.
Are the proposals for ethnicity and disability pay gap reporting consistent with the existing requirements for gender pay gap reporting?
Yes, in the following ways:
- Geographical scope: which means that private employers in Great Britain are in scope.
- Pay gap calculations: large employers will be required to report the same six measures for ethnicity and disability pay gap reporting as they already do for gender pay reporting.
- Dates and deadlines: mandatory ethnicity and disability pay gap reporting will have the same reporting dates and online service as gender pay gap reporting.
- Enforcement: ethnicity and disability pay gap reporting will mirror the Equality and Human Rights Commission’s enforcement policy for gender pay gap reporting.
What new requirements will apply in relation to disability and ethnicity pay gap reporting?
The Government's consultation outcome has confirmed that employers' disability and ethnicity pay gap reporting will need to cover the following:
- Workforce reporting: reporting on the breakdown of the workforce will be by ethnicity and disability status.
- Declaration rates: reporting data on the percentage of employees who did not state their ethnicity or disability status will be required.
- An equality action plan for ethnic minority employees and disabled employees: employers will be required to act upon their ethnicity and disability pay gap data by taking actions to address and reduce pay gaps. It is likely that employers will be able to produce a single equality action plan covering sex, race and disability.
- Ethnicity data collection and calculations: ethnicity pay gap reporting will require employers to report a binary comparison as a minimum between White (including White Other) and all other ethnic groups combined, and also aggregate to five ethnic groups where possible. Ethnicity data calculation will be in line with the GSS harmonised standards, and aggregation will be in line with ONS guidance. There will be a threshold for employees for each group being reported on to protect anonymity. Policy work is ongoing to determine the most appropriate threshold.
- Disability data collection and calculations: disability pay gap reporting will require employers to report a binary comparison between disabled and non-disabled employees, using the Equality Act 2010 definition of disability. There will be a threshold for employees for each group to protect anonymity, but policy work is ongoing to determine the most appropriate threshold.
Other considerations
Employers will need to consider the following issues when preparing equality action plans and reporting on the disability and ethnicity pay gap:
| Issue | Comments |
|---|---|
Collecting, storing and reviewing data | Employers will need to make sure they have appropriate systems in place for collecting, storing and reviewing data for equality action plans and gender pay gap reporting in a way that protects confidentiality and complies with data protection requirements (see further below). |
Data protection and confidentiality | Employers must tread the line between compliance with the reporting obligations while complying with data protection legislation. When reporting on the disability and ethnicity pay gap, protecting the anonymity of employees is crucial. Similarly, employers will want to avoid disclosing confidential or commercially sensitive information. |
Adverse publicity | Employers should be aware of the potential for adverse publicity and reputational damage, particularly if disclosures show a significant pay gap by comparison to peer employers. |
Claims under the Equality Act 2010 | Be aware that documents and information relating to the preparation of equality action plans and pay gap reporting may become disclosable in litigation. |
Impact on recruitment and morale | As with gender pay gap reporting, adverse disclosures could affect recruitment and retention of employees as well as staff morale so this is something for employers to try to head off. |
