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Despite Northern Ireland initially leading the way with a proposal to extend gender pay gap reporting to include ethnicity and disability pay gap reporting (the intention was first laid out in the Employment (Northern Ireland) Act 2016), in a synopsis of responses to the public consultation on the introduction of gender pay gap reporting in Northern Ireland, the Department for Communities reveals those plans will not be proceeding, at least for now.
The Department has released its official response to the recent and long-awaited consultation on regulations to enact a pay gap reporting regime in Northern Ireland. We discussed the proposals and potential impacts in detail here. In this insight, we take a look at how the Department plans to proceed, what will or won't go ahead and what remains uncertain.
Ethnicity and disability pay gap reporting considered, but rejected (for now)
The requirement to report on ethnicity and disability was an aspect of pay gap reporting that was unique to the Northern Ireland framework and remained firmly part of the legislative agenda in the original consultation. However, crucially, the proposals lacked the substantive detail about how this kind of reporting regime would work in Northern Ireland.
The 45 responses to the Department's consultation reveal that, whilst there is overall support for the proposal to report on disability and ethnicity pay gaps, there are concerns over the merits of reporting on this data or around how the data could be collected given the absence of any current legal obligation to do so. Issues were raised about how disability and ethnicity would be defined, the risk of identification and potential data breaches due to smaller data sets, reluctance of employees to disclose disabilities, and the limited statistical value or use of the data.
Why isn't ethnicity and disability pay gap reporting going ahead?
As a result, the Department has, for now, ruled out using the Gender Pay Gap Regulations to capture ethnicity and disability data as it believes it would not actually be legally enforceable and therefore likely to be legally challenged. It relies on the following reasons to support this view:
- Employers are not obliged to gather data on employees' ethnic origin and disability;
- Disclosure of a disability is voluntary so details are typically not collected by employers; and
- Whilst Section 75 of the Northern Ireland Act 1998 encourages employers to share equality data with the Equality Commission for Northern Ireland, mandatory reporting is limited to community background and gender.
As it stands, there is currently no legal requirement to report on an organisation's ethnicity and disability pay gap in the rest of the UK or in Ireland, but the UK Government plans to introduce it as part of wider plans in the Equality (Race and Disability) Bill which is expected to be published in the coming months. You can read our previous article summarising the proposed method of reporting that will apply in Great Britain and our views on the practical impacts and challenges here.
The Department says it will keep a watching brief on the Bill as it makes its way through Westminster, so whilst these plans are shelved for now, they do not appear to have been binned entirely.
Scope is clear but thresholds remain undecided
Under the Department's original proposals, the duty to report would apply to all employers in the private, public and voluntary sectors, with more than 250 relevant employees. It was originally estimated that using those thresholds would capture approximately 345 employers in the jurisdiction.
Whilst the Department has confirmed its intention to include employers from all three sectors within mandatory reporting obligations, only 38% of respondents to the consultation agreed that the threshold of 250+ employees was appropriate for Northern Ireland.
What should the headcount threshold be?
A variety of responses were given on what the appropriate threshold should be, including a preference to align with that set out in the EU Pay Transparency Directive (PTD).
It is important to bear in mind that the gender pay gap reporting regime in Northern Ireland coincides with a broader global move towards requiring employers to be more transparent about pay and pay gaps, and particularly the advent of the EU PTD. Under the PTD there will be a gradual lowering of the threshold to eventually bring employers with 100 workers into scope for reporting.
Will the PTD apply in Northern Ireland?
Applicability in Northern Ireland remains uncertain. The Equality Commission and Human Rights Commission for Northern Ireland consider that, under the Windsor Framework's dynamic alignment, most obligations should apply and will need to be implemented. Whether this is the case and how they will interact with this new gender pay gap reporting regime is still being considered. For now, it seems the Department is waiting to see how this will play out before committing Northern Ireland to a definitive threshold.
Whilst reforms in GB reveal no plans to lower the existing reporting threshold of 250+ employees, earlier this year the Republic of Ireland extended existing reporting obligations to all employers with 50 or more employees.
There were concerns that adopting the GB threshold would exclude many Northern Ireland businesses from reporting due to their smaller size. The Department's report indicates, however, that a 250+ employee threshold would cover about 53% of the NI workforce, compared to 55% in Great Britain. Lowering the threshold to 100 or more employees would, however, increase coverage in Northern Ireland by approximately 9.9%.
In the meantime, this leaves uncertainty for employers as to whether their businesses will be captured by the new NI reporting regime, leading to potential complications with budgeting and planning. We will be closely watching developments in this area.
What else will happen with gender pay gap reporting in Northern Ireland?
- The process in terms of frequency, methodology, reporting figures and snapshot dates will align with what is already in place in the rest of the UK which will be a relief for employers across both jurisdictions.
- Employers will be required to publish data on their website, and a central government portal is also being explored.
- The Equality Commission for Northern Ireland will be responsible for enforcement.
- It will be mandatory to accompany calculations with action plans, and the Department will provide further guidance on the form, frequency and publication of those plans. Action plans are not currently required in GB, but the Employment Rights Bill will introduce these on a voluntary basis in April 2026, before becoming mandatory in 2027.
- The synopsis provides no real detail on sanctions. Consultation responses proposed turnover based fines for repeated or prolonged breaches, public "name and shame" for persistent noncompliance, and potential exclusions from public procurement and government funding. Others urged a collaborative, non-punitive approach. The Department will consider sanctions further as the Regulations are developed and will focus on proportionality encouraging compliance in the first instance.
- Regulations to give effect to gender pay gap reporting will be introduced as soon as possible the 'Good Jobs' Employment Bill has received Royal Assent – so there is still time to wait.
The full Synopsis can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
