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The Queen's aides banned "coloured immigrants or foreigners" from working office jobs in the royal household until at least the late 60s, newly unearthed documents show.
National Archives files uncovered by the Guardian revealed that they were allowed to work as domestic servants.
It comes after Prince Harry and Meghan Markle accused an unnamed member of the Royal Family of racism in their bombshell Oprah tell-all.
Her Majesty remains exempt from racial and gender equality laws to this day, it was reported on Wednesday.
The Queen's chief financial manager informed civil servants that "it was not, in fact, the practice to appoint coloured immigrants or foreigners" in clerical roles at Buckingham Palace, the papers said.
Buckingham Palace has been contacted for comment by the Daily Star as it remained unclear when the ban was revoked.
A spokesman told the Guardian that its records showed people from ethnic minority backgrounds being employed in the 1990s.
But the palace reportedly refused to answer questions about the ban and when it was revoked, saying that it did not keep records on the racial backgrounds of employees before then.
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The official documents revealed how government officials in the 1970s coordinated with Elizabeth Windsor’s advisers on the wording of the laws.
Buckingham Palace did not dispute that the Queen remained personally exempted from gender and racial equality laws that came into force in the 1970s.
It added that it had a separate process for hearing complaints related to discrimination.
The Guardian reported that in 1968, the then home secretary, James Callaghan, and civil servants at the Home Office appear to have believed that they should not request Queen’s consent for parliament to debate the race relations bill until her advisers were satisfied it could not be enforced against her in the courts.
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At the time, Callaghan wanted to expand the UK’s racial discrimination laws, which only prohibited discrimination in public places, so that they also prevented racism in employment or services such as housing.
One key proposal of the bill was the Race Relations Board, which would act as an ombudsman for discrimination complaints and could bring court proceedings against individuals or companies that maintained racist practices.
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A Buckingham Palace spokesperson said: "The royal household and the sovereign comply with the provisions of the Equality Act, in principle and in practice.
"This is reflected in the diversity, inclusion, and dignity at work policies, procedures, and practices within the royal household.
"Any complaints that might be raised under the act follow a formal process that provides a means of hearing and remedying any complaint."
The palace did not respond when asked if the monarch was subject to this act in law.
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