Briefing | CIPD responds to ethnicity and disability pay gap reporting consultation and calls for evidence

What are our recommendations? 

The CIPD recommends that the duty for EDPR should initially apply to organisations with 1,000 or more employees. Over time, the requirement could extend to those who have between 500 and 999 employees, and eventually to those with between 249 and 499 employees. This gradual roll-out could emulate the successful approach used for automatic pension enrolment and aligns with the EU’s pay transparency directive. 

After the introduction of pay reporting for workplaces with 1,000 or more people, the government should commission an evaluation of that group of employers to find good practice lessons around pay reporting that could be shared with the next two cohorts of large employers, helping them to learn and prepare. The CIPD believes that the earliest that employers with 1,000 or more workers should be required to start EDPR would be the reporting year 2027/28. 

This would give organisations with between 250 and 999 people the time to review and where necessary to improve their data recording, collection, and analysis systems, as well as to boost disclosure rates among employees.

We are concerned that a rushed approach could risk poorly executed reporting and missed opportunities for meaningful change, particularly during a time when employers are facing increased employment costs, ongoing economic uncertainty, and new legislative requirements from the Employment Rights Bill. With so many issues for workplaces to respond to, we fear that EDPR would not receive the priority it deserves if it were introduced for all large employers at the same time. 

The CIPD supports the consultation proposals for employers to also publish an equality action plan that outline how they intend to address disparities. As with EDPR itself, we recommend this should begin first with the largest employers (those with 1,000 employees or more), before gradually including those employing between 500 and 999 people and eventually those with between 250 and 499 people. These action plans should be clear, data-driven, and practical, and be focused not just on intent, but also on measurable outcomes.

Again, this phased approach will give workplaces employing between 249 and 999 people more time to improve their ethnicity and disability disclosure rates, update their HR information systems, and learn from the experience of employers with 1,000 or more people. However, it is important that the government sets out and clearly communicates a roadmap that says what will be required, why, from whom, and by when. 

The CIPD recommends that action plans should be uploaded by the organisation on the appropriate pay reporting websites, and this should either give direct access to the report itself, or be a weblink to the report. To ensure that these plans are accurate, they should be verified by a senior leader within the organisation with professional HR credentials, such as a chartered fellow of the CIPD. This will help ensure consistency, accountability, and build public confidence. 

The CIPD also recommends that the Equality and Human Rights Commission (EHRC) be given the responsibility and the resources to not only ensure employer compliance with both EDPR and action plan publication, but also offer employers information, guidance, and advice. This could include offering templates, training, and sector-specific advice. 

What are the next steps? 

Crucially, as the CIPD has previously highlighted in our response to the Office for Equality and Opportunity’s Equality law call for evidence, this agenda is about more than compliance. It’s about driving better people decisions and unlocking the full potential of the workforce. Pay transparency, done well, has the potential to improve employee trust, help attract and retain top talent, and support more inclusive organisational cultures. Ultimately, contributing to improved business performance and wider economic growth. 

Based on CIPD research, we revealed in our response a striking lack of transparency across many organisations. Few employers, especially in the private sector, include pay details in job adverts, explain how pay decisions are made internally, or communicate how pay structures are shaped. Public and voluntary sector organisations perform better in this regard, particularly in outlining pension contributions. But overall, there is significant room for improvement. 

Transparency and equity in pay are increasingly becoming expectations of a modern workplace. The proposed measures in the Equality (Race and Disability) Bill offer the government an opportunity to advance that goal. However, success will hinge on getting the right balance between the ambition of the legislation and the detail within it, with a need for sufficient preparation and support for employers. 

The CIPD will continue to offer guidance to people professionals, and work with government and employers to build more inclusive and high-performing workplaces for all. You can find more about our response to the Office for Equality and Opportunity’s Equality law call for evidence here.