IUA responds to government proposals for pay gap reporting

The International Underwriting Association (IUA) has responded to government plans to make ethnicity and disability pay gap reporting mandatory.

The proposed equality, race and disability bill suggests that large firms of more than 250 employees should have to report differences in pay according to both ethnicity and disability.

A government consultation launched on 18 March to seek views on the plans. It will close at the end of 10 June 2025.

IUA members have highlighted that mandatory reporting can provide valuable insights, reveal areas for improvement and prompt discussions on workplace culture.

However, the disclosure of an employee’s ethnicity or disability relies on self-reporting, which can accumulate low participation rates – leading to concerns that individual salaries could become identifiable.

As a result, some IUA companies believe that a threshold of 1,000 employees would be more appropriate than the proposed 250 limit.

’Important role’

Nafisah Hussain, senior public policy executive at the IUA, said: “Our members appreciate that ethnicity pay gap reporting has an important role to play in promoting transparency and driving change.

“Privacy is also a vital consideration, especially when participation rates are low. Grouping data broadly may limit its usefulness, but breaking it down could result in unintentionally identifying individuals.

“We believe that the government should also be seeking to look beyond numerical reporting to focus on career progression and talent movement within organisations.”

Liisa Antola, senior policy advisor for diversity, equity and inclusion (DEI) at the ABI, added: “We support the government’s proposals to mandate the reporting of ethnicity and disability pay gaps for large employers. As set out in our DEI Blueprint, we want our industry to reflect the diverse communities we serve. To achieve this, contextual narratives on the data are required to understand where we need to do more for certain colleagues and the progress we are making to improve their experience in the workplace. 

“It is also important to ensure that any new reporting requirements come with clear guidance distinguishing pay gap reporting from equal pay. For example, employers must retain the flexibility to offer competitive salaries based on factors that can legitimately influence pay decisions, such as experience, performance and location of a role.”