Employment Law Guide 2026: Draft equality (race and disability) bill

2026 could see the publication of the Government’s draft Equality (Race and Disability) Bill following a call for evidence in April 2025. The Bill could:

• Require large employers (those employing 250 or more employees) to report on their ethnicity and disability pay gap
• Extend equal pay rights to protect workers suffering discrimination on the basis of race or disability
• Ensure employers can no longer avoid paying equal pay by outsourcing services
• Require employers to identify actions to avoid equal pay breaches occurring or continuing
• Introduce pay transparency measures such as requiring employers to include salary or a salary range in job adverts, prohibiting employers from asking candidates about their salary history and requiring employers to provide employees with information on pay, pay structures and progression criteria
• Allow for discrimination claims to be brought where someone suffers discrimination due to a combination of protected characteristics
• Introduce protection against sexual harassment for interns and volunteers.

In March 2025, the Government opened a consultation setting out its proposals for requiring large employers to report on their ethnicity and disability pay gaps. It proposes that they should report on the same pay gap measures as for gender pay gap reporting, using the same snapshot date of 5 April each year and reporting their pay gaps online by 4 April the following year. The Government sought views on whether employers should have to produce action plans for closing their ethnicity and disability pay gaps (which is set to become mandatory for gender pay gaps in 2027 – see below). The Government also proposes that large employers should be required to report on the overall breakdown of their workforce by ethnicity and disability and on the percentage of employees who did not disclose their ethnicity and disability.

There is expected to be significant consultation on the Bill’s provisions, as well as further consultation on the secondary legislation required to implement its provisions. It is not therefore clear when the Bill will make it on to the statute books or when the changes will come into force.

Action points

• Assess your systems for data capture, including how you obtain information from employees about their protected characteristics
• Consider undertaking internal disability and ethnicity pay gap reports now to help identify any gaps or inconsistencies in your data. This should be done with assistance from solicitors so that it benefits from legal privilege.

Changes in 2027

In addition to the changes to unfair dismissal laws (see above), further significant changes to employment laws are expected to come into force in 2027.