How the UK is keeping up with the global shift in pay transparency

27th June 2025

Julia Hanna

There are a couple of articles that have caught my eye in the last week. The first was a really helpful guide from DLA Piper summarising pay transparency globally.

The second were UK media headlines around employers telling workers how much their colleagues earn, which raised some expectations (and a few eyebrows).

Of course nothing is quite what it seems. So, I thought I give a quick round up of changes relating to pay transparency in the UK that are in the wings:

Extending pay gap reporting

Consultation closed recently (10^th June 2025) on an element of the draft Equality (Race and Disability) Bill.

Although no outcomes have been published, it’s expected that gender pay gap style reporting will be extended to ethnicity and disability.

It’s anticipated that:

employers with 250+ employees will have to comply
in addition to the metrics calculated for gender (mean and median pay and bonus gaps etc.), employers will have to provide a workforce breakdown by ethnicity and disability
and action plans may well become mandatory

For ethnicity:

the categorisation is likely to follow the Government Statistical Service (GSS) ethnicity harmonised standard (as per the 2021 Census) which has 18 categories of ethnicity, plus a requirement of “prefer not to say” which makes 19
analysis will be where an ethnic category has at least 10 employees
if needed, categories can be added together to create a group for reporting purposes using ONS Guidance
binary reporting can only be used if there are no groups of sufficient size available
there remains a question mark over whether the primary reporting group is to be “white” or “white British”

For disability, the reporting will be binary.

It’s anticipated that the earliest reporting will be for a snapshot date 2026, reporting in 2027.

So, what action should we be taking now?

If you’re not collecting information on ethnicity and disability, consider what processes need to change. If data is already collected:

check your disclosure rates and of course encourage disclosure by clearly explaining why such personal information is needed and how it will be used.
and check that the data you are collecting is in line with government categorisation and consider any changes needed.
and of course, consider voluntarily calculating and publishing your ethnicity and disability pay gaps and designing your action plan early.

Equality law reform

There’s a separate consultation closing on 30^th June 2025 that is inviting feedback on equality law reform to extend the right to equal pay from gender to include ethnicity and disability, and improving pay transparency.

The requirements for pay transparency are very much aligned to the recent EU Pay Transparency Directive, including:

banning salary history questions at recruitment
including salary ranges in job adverts
publishing clear criteria for salary progression
allowing employees to compare their pay with colleagues doing like work

A dedicated enforcement unit is also being proposed.

The aim is to ensure employers proactively consider pay equity through not only reporting, such as gender pay gaps or equal pay audits, but also ensuring the approach to pay and pay decisions are transparent and can withstand scrutiny from employees, regulators and Unions.

We’re talking to lots of clients about how to gear up for greater pay transparency by:

developing robust pay principles
designing job levels to help determine ‘like work’
creating salary ranges that can be shared with existing and prospective employees
and conducting equal pay audits

Of course, none of this is yet law, but greater transparency around pay for all groups is a good thing.

If you’d like any help to consider how you can prepare for any legislative changes, please do get in touch.

How we can help

At Verditer, we are specialists in creating a transparent approach to pay and reward. Do get in touch if you’d like our help to get ready for pay equity and transparency, including setting a reward strategy, or creating pay foundations such as career levels and pay structures.

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