Mandatory disability pay gap reporting: Unintended consequences found

Findings from a new report published by Business Disability Forum (18 March) show that mandatory disability workforce and disability pay gap reporting can have many unintended consequences for disabled employees. ‘Towards meaningful disability workforce and pay gap reporting – The challenges and unintended consequences’, also finds that while mandatory reporting is well-intentioned, reporting on numbers and the pay gap alone would not achieve meaningful change for disabled people in the workplace.

The report presents the findings of a long-term qualitative research project conducted by Business Disability Forum (BDF) in response to government proposals to introduce mandatory disability workforce and pay gap reporting. The research captured the experiences of disabled employees and employers around reporting disability data.

BDF hopes that its findings and recommendations will inform new proposals and legislation on mandatory disability workforce and pay gap reporting and make sure they are as effective as possible in achieving their desired aims.

Business Disability Forum’s Director of Public Policy and Research, Angela Matthews, said:

“At first glance, mandatory disability workforce reporting seems simple and the right thing to do. Our research shows, however, that reporting on numbers alone will not achieve greater inclusion for disabled people in workplaces and in the wider labour market. Worse still, such reporting may even come at the expense of inclusion with both disabled employees and employers expressing concerns about the unintended consequences of current proposals.

“Meaningful disability workforce and pay gap reporting must measure the experience of disabled people in the workplace, not just provide a snapshot of how many disabled people were in employment and what they were paid at one particular moment in time. We urge the Government and other decision makers to take on board our findings and recommendations as they take forward their plans.”

Challenges and unintended consequences

The research conducted by BDF found that:

• Mandatory disability workforce and pay gap reporting can have many unintended consequences for disabled employees. BDF research shows evidence that employers are sometimes declining reasonable adjustments such as a reduction in hours and job carving (fitting the job to the person) so that it does not widen their organisation’s disability pay gap.  
• Disabled employees were more against mandatory reporting than employers. The research shows that employers were not ‘against’ having to collect and report on the data; they just didn’t think it was effective and the right type of data to focus on if they wanted to make meaningful changes for employees in the workplace.  
• Newly proposed reporting requirements would mean some employers would need to fulfil four (sometimes more) mandatory reporting responsibilities – each with different requirements.  New reporting requirements would add to the existing mandatory reporting which has been carried out for decades in many industries.
• Organisations that had opened up their support and workplace adjustments support to any employee who wanted to work in a different way found that the number of employees saying they have a disability fell. Employers, who took part in the research, said this was because when they have good processes, they “rarely” need to know if an employee has a disability, just what they are finding difficult. Disabled employees who worked in organisations where they felt included and had all the adjustments they needed also said they “haven’t needed to” say they have a disability.  
• Meaningful disability pay gap reporting isn’t about how much disabled employees earn; it’s about why they earn what they earn. The research shows that while some disabled employees wanted to do more, others want to do less to help them manage their disability and keep working, even if ‘keeping working’ means less hours. 

“It’s rare that we need people to disclose their disability. If instead we ask everyone what they need, that’s actually all we need. By requiring disclosure, we exclude people who aren’t diagnosed.” An employer

“Inclusion appears to be ‘double edged’. To be included, do we have to say we have a disability? Employers should just be kind to everyone.” A disabled employee

BDF’s recommendations

BDF is making the following recommendations to Government, businesses and employers based on its findings and in response to current proposals and draft legislation.

Recommendations for Government

• Recognise that mandatory workforce reporting puts the onus on disabled employees to share as much as it puts a duty on employers to report. Reportable figures are not about how many disabled people there are in a workforce; they are about how many disabled people have chosen to tell their employer that they are disabled – and no employer should be pressurising disabled people to share this information at work if they do not want to. 
• Check that nothing in the proposal discourages employers from taking up and expanding disability employment programmes and job carving initiatives just to improve their pay gap figure. Clearly categorise employers who engage in such schemes and allow employers to identify if they have undertaken formal, sizeable disability employment schemes and programmes, so that this is noted and flagged against their data.
• Allow employers to submit a narrative with their workforce and/or pay gap figures which shows the story behind the figures. It is in the interest of businesses to share this narrative in their reporting as it allows them to show the good practices that they are doing, and to say what they plan to do to improve their figures and where they are going to focus. This also enables employers to share other measures like engagement scores, satisfaction with workplace adjustments and other indicators that help give an indicator of how it “feels” to work here.  
• Make sure any disability pay gap requirements introduced allow for reporting by hourly pay as well as by hours worked. This would allow for both the overall pay gap to be captured, and for employers to follow up with disabled employees to check if they are happy with their current hours or if they have unsuccessfully tried to gain more work in the organisation. In this case, employers should look into the reasons for this.
• Explain how the Government will identify and what it will do to act when employers are demonstrating practices that are resulting in poor experiences for disabled people. This includes practices such as denying employees’ adjustments requests in order to improve figures or to narrow their disability pay gap. 

Recommendations for employers

• Regardless of any mandatory requirements, consider how you collect data and what you really need. Explain to employees why you are collecting it and how it is going to help improve the working experience of disabled employees.  
• Don’t focus on whether someone has a disability. Focus on understanding if someone is struggling, experiencing barriers, or needs help. The main question that employers said they’d be comfortable asking and employees said they’d be comfortable being asked was, “What are you finding difficult and how can I make it easier?”  

“I will tick your box when I get my adjustments that were recommended 6 months ago”.​ A disabled employee

“Job carving, reducing hours. I have declined those adjustments because it would affect our organisation’s disability pay gap”. An employer

Go to Business Disability Forum’s website to access the full report and the executive summary .

Ends