Members of the International Underwriting Association have supported plans to introduce mandatory ethnicity and disability pay gap reporting.

The IUA’s comments came in response to a Government consultation on a proposed Equality (Race and Disability) Bill, which suggests that large firms of more than 250 employees should have to report differences in pay according to both ethnicity and disability.

IUA members have welcomed the proposals, stating that mandatory reporting can provide valuable insights, highlighting areas for improvement and prompting discussions on workplace culture.

That said, companies cannot compel employees to disclose their ethnicity, and voluntary participation rates can be low. Similarly, disability data relies on employees self-reporting. As a result there are concerns that individual salaries could become identifiable. Some IUA companies believe that a threshold of 1,000 employees would be more appropriate than the proposed 250 limit.

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.”

The IUA’s consultation response states that pay gap data, while a useful indicator, can sometimes provide only a limited view. For example, an increase in recruitment at entry-level roles may initially widen the gap, but is intended to support long-term progression and career development within an organisation.

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