Government seeks views on reforms to equal pay and pay transparency laws

At a glance

• The UK government has launched a consultation on wide-ranging equal pay reforms aimed at simplifying enforcement, preventing pay discrimination and strengthening compliance obligations.
• Employers could be required to disclose pay and benefits information in job adverts or before interviews, introducing a significant new level of pay transparency.
• A new Equal Pay Regulatory and Enforcement Unit (EPREU) is proposed, with powers to investigate employers, require evidence and promote compliance with equal pay laws.
• The consultation also proposes extending equal pay-style protections to race and disability pay discrimination claims, alongside enhanced remedies and enforcement measures.
• Businesses should begin reviewing recruitment processes, pay structures and job evaluation arrangements ahead of potential reforms, although the government has confirmed there will be an extended implementation period.

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Reforms to the UK’s equality laws have taken a significant step forward with the publication of a new consultation paper, which seeks to address issues with the current equal pay framework, which is described by the government as ‘excessively complex, costly and protracted’. This consultation follows pledges made in the Plan to Make Work Pay, Next Steps to Make Work Pay, and an April 2025 Call for Evidence and its findings.

The proposals are wide-ranging and potentially significantly impactful for employers. Steps should be taken now to understand what they may mean for your business.

Overview

The consultation seeks views on:

• Measures designed to proactively prevent pay discrimination.
• Ensuring enforcement agencies are empowered to drive good practice.
• Simplifying the resolution of disputes when they arise.

The consultation runs for 15 weeks, ending in the autumn.

In welcome news for employers, the consultation paper makes clear that employers will have time to prepare for any changes and there will be an extended implementation period before any measures take effect.

Pay transparency

The April 2025 Call for Evidence had appeared to suggest that the government may introduce extensive pay transparency measures, aligned with the obligations under the Gender Pay Transparency Directive (Directive) (which Member States should have implemented by 7 June 2026, albeit that the majority of countries have yet to fully comply). 

However, the consultation paper adopts a slightly different approach, as follows:

Disclosure of pay information

The government proposes that there will be a statutory requirement for employers to publish information about pay and conditions in job adverts. Where there is no job advert, employers must give the job applicant the information in writing before the job interview. These measures do broadly align with the Directive obligations and are significant. There is no doubt that they will impact many employers’ recruitment practices going forward.

Job evaluations and pay audits

The government proposes to strengthen and clarify existing measures relating to job audits and evaluations. It suggests that where an Employment Tribunal finds that an employer has committed an equal pay breach:

• The current exceptions to the circumstances in which an employer must be ordered to complete a pay audit will be reduced and clarified, meaning that an audit will only not be ordered if a valid audit has been done in the last three years.
• The employer must be ordered to implement a non-discriminatory job evaluation scheme if an up-to-date scheme is not already in place.

Statutory pay discrimination questionnaires

In a slightly different approach to the Directive, which entitles employees to submit a request for information about their pay and the pay of comparable workers, the government proposes to reintroduce a statutory questionnaire process (something which was previously in place, but repealed with effect from April 2014), adapting the previous format and making it simpler. As before, the questionnaire would have a list of standard questions.

The government believes that reintroducing the questionnaire will assist employees to identify an appropriate comparator or get information about components of pay – but also, in turn, support the early resolution of cases and enable claims to be better informed and targeted.

The final form of the questionnaire will be informed by the consultation responses and designed in partnership with employers, trade unions and other stakeholders. In addition, there will be comprehensive guidance to support employers.

Importantly, employers will not be obliged to respond to the questionnaire; however, courts and tribunals will be able to draw an interference from a failure to answer a question within a set period of time, or an evasive answer.

New Equal Pay Regulatory and Enforcement Unit

The government proposes to introduce a new EPREU which will have the power to uphold pay equality. Its work will include improving the tools available to help employers and workers to uphold the law, including providing clear guidance and overhauling the statutory code of practice for equal pay.

The government is considering a number of options for where the new EPREU would sit. The options include basing it within the Equality and Human Rights Commission, the Fair Work Agency or other government agency, or creating a new independent body.

 The consultation also seeks views on:

• The ability of EPREU to require the disclosure of evidence before triggering a formal investigation process, including verbal evidence, pay data and information.
• Enabling EPREU, as part of the investigation process, to require that a job evaluation scheme and / or equal pay audit be undertaken where this would help to establish whether pay discrimination has occurred.
• The ability of EPREU to require those subject to inquiry recommendations to respond to them and provide updates on implementation.

Race and disability: Levelling up direct and indirect discrimination provisions

In a suggested Phase 2 to the reforms (only taking effect after the proposals above have been implemented), the government proposes to broadly level up the Equality Act 2010’s protections against pay discrimination on the basis of race and disability, and those it provides under the equal pay scheme against pay discrimination on the basis of sex.

Its proposals include that:

• Employment Tribunals would be able, by way of remedy, to modify the terms of a claimant’s contract where it has been found to be discriminatory in a claim of direct or indirect discrimination (relating to sex, disability or race); discrimination arising from disability; or a breach of the duty to make reasonable adjustments. The government believes this would align with the concept of contractual modification under the existing equal pay regime.
• Employers found to have discriminated in terms of pay on the basis of race or disability would be ordered to undertake an equal pay audit. In addition, they would be required to undertake a job evaluation scheme.
• It will enable claims for pay discrimination relating to race and disability where work is ‘rated as equivalent’ or of ‘equal value’.
• It will permit hypothetical comparators under the equal pay regime in two limited prescribed scenarios.
• Time limits for equal pay claims will be extendable on ‘a just and equitable basis’, as is currently available for direct and indirect discrimination claims.

Increased protections for outsourced workers

In order to address the fact that the existing requirements under the Equality Act 2010 prevent many outsourced workers from comparing their contractual terms with those of ‘in-house’ employees and seeking any redress in the event of inequality, the government proposes a new duty on contracting parties to take all reasonable steps to uphold pay equality in their contractual arrangements.

Its key proposals are as follows:

• The work in question would need to meet a minimum threshold and be connected to a task that is of more than short-term duration.
• There would be a power enabling regulations to specify any steps that would be considered reasonable, as well as steps that would not be considered reasonable. Relevant considerations would include the parties’ size, resources, and whether they are in a position to dictate the terms and conditions of the companies with whom they contract.
• There would be comprehensive guidance.
• A breach of the duty would not lead to a requirement to pay compensation to affected workers.
• EPREU would be able to bring a claim in the Employment Tribunal or use its other enforcement powers, such as its investigation powers. Individual employees would not be able to bring claims for a breach of this duty themselves.

Next steps for employers

The government’s proposals represent a significant package of equal pay and pay transparency reforms. Employers should use the consultation period and anticipated implementation lead-in time to review recruitment practices, pay structures, job evaluation arrangements and equal pay compliance more broadly.

Although the detail is yet to be finalised, the direction of travel is clear: greater transparency, stronger enforcement and an increased expectation that employers take proactive steps to identify and address pay inequality before disputes arise.