EU Mandates Ethnicity and Disability Pay Gap Reporting
EU employers with over 250 staff will soon face mandatory reporting on ethnicity and disability pay gaps, raising significant new data processing and privacy concerns.
The European Union is introducing a phased program of changes to its equal pay laws, which will create mandatory new reporting obligations for larger employers. Companies with more than 250 staff will be required to report on pay gaps based on employee ethnicity and disability. This development is significant not only for its impact on HR and compliance departments but also for the data-handling challenges it presents. To comply, organizations must collect, hold, and process large volumes of highly sensitive personal data, creating substantial new risks and obligations under data privacy laws such as the GDPR. Legal counsel for affected companies should be proactive in ensuring a valid legal basis for processing this data and implementing robust security measures. The changes come as the UK is reportedly considering its own pay transparency reforms, making this a key area for multinationals to monitor.