The government has announced plans to introduce a Draft Equality (Race and Disability) Bill outlined in the King’s Speech 2024. The Bill will be published in draft form (probably in Spring 2025) for consultation and seeks to fulfil Labour’s manifesto commitment to "enshrine the full right to equal pay in law" for individuals from ethnic minority backgrounds and disabled people.
Strengthening Equal Pay Rights
The Bill aims to make it easier for people to bring unequal pay claims by addressing the existing barriers in bringing pay discrimination claims based on ethnicity or disability.
Mandatory Ethnicity and Disability Pay Reporting
Employers with 250 or more employees must report ethnicity and disability pay gaps. This is intended to highlight disparities and encourage employers to take proactive measures to close these gaps.
Greater transparency: The Bill will introduce mandatory pay gap reporting, providing data-driven insights into disparities and encouraging employer accountability.
Legal certainty: The Bill offers enhanced legal protections for people encountering unequal pay, ensuring more transparent pathways for claims and enforcement.
Aligning with Gender Pay Gap Reporting: The proposed framework extends the current gender pay gap reporting model, which has effectively identified gender-based pay disparities in large organisations.
The draft Bill will be subject to pre-legislative scrutiny before formal introduction to Parliament.
The Government Equalities Office (GEO) will lead consultations on the Bill throughout 2025.
A regulatory enforcement unit is expected to be created to support compliance and enforcement.
The Bill seems to substitute Labour’s earlier proposal for a Race Equality Act, which had recommended imposing fines on non-compliant employers and offering protections against dual discrimination.
While this Bill strengthens equal pay rights, it does not explicitly contain provisions addressing dual discrimination (where individuals are discriminated against based on a combination of protected characteristics).
Employers should begin reviewing internal pay structures and diversity reporting to prepare for potential compliance requirements.
Businesses should stay informed on further developments as the consultation process progresses.
Organisations may wish to participate in the consultation process to provide input on the proposed measures.
For further details, refer to the Next Steps Paper (October 2024) and Government Equalities Office updates. We expect the draft Bill to be published in Spring 2025, and will continue to monitor developments and provide updates as more information becomes available.
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