The government has recently published a major consultation seeking views on how it comprehensively reforms the pay discrimination and transparency framework, from changes to existing equal pay laws and extending these to ethnic and disabled workers, to following the EU’s approach of promoting transparency of pay practices and establishing a new Equal Pay Regulation and Enforcement Unit.
In this blog post, we outline the key proposals and give some context for how we got here and what comes next.
Why is the government considering these reforms?
This consultation follows the government’s Make Work Pay plan, which committed to extending equal pay rights to ethnic minority and disabled workers (a commitment that led to many unanswered questions – see our previous commentary here). However, this consultation goes considerably wider than that commitment alone.
This consultation also does not emerge in a vacuum. It follows the publication of a series of research reports commissioned by the government examining pay discrimination in the UK labour market, as well as the government’s previous call for evidence on equality law. Together, the government believes this body of evidence paints a troubling picture: the existing law on pay equality has become excessively complex, costly and protracted, resulting in many workers with genuine grievances being deterred from bringing claims. As a result, the government is now of the view that it needs to reform the current system and focus on pay transparency before it can broaden protections to address inconsistencies in the law.
The EU model
A key driver of this consultation is the shift in approach to pay transparency across the EU. The EU Pay Transparency Directive entered into force in 2023, but is subject to local implementation (which has been delayed in most of the major EU markets). The Directive introduced wide-ranging obligations on employers, including requirements to provide information to job applicants about starting pay or pay ranges before interviews, to disclose pay information to employees on request, and for larger employers, to carry out regular pay reporting and joint pay assessments where pay gaps are identified within a category of workers (read more about EU pay transparency here).
Whilst the UK is no longer bound by EU law, the government is keenly aware that UK employers competing for talent internationally, and particularly those operating across both the UK and the EU, will increasingly be subject to these obligations on the continent. This consultation signals that the government wishes to ensure the UK framework is coherent and competitive in this context, and that workers in the UK benefit from comparable standards of pay transparency. However, the model proposed by the UK government does not track the European approach and uses some structures drawn from the UK’s historic approach to equal pay, while proposing a stronger enforcement regime and greater access to information for job candidates and employees.
The proposals: a two-phased approach
The consultation is structured around two phases of consultation and reform.
The first phase focuses on proposals designed to fix the structural weaknesses at the heart of the current system. The proposals under consideration in phase one include:
- Transparency of pay practices. The government is consulting on requirements for employers to be more transparent about their pay structures and practices. In particular, it wants to introduce a new requirement for all employers to publish pay information in job adverts or in writing before interviews, albeit it is seeking views on the level of pay information that would be required. This is intended to make it easier for workers to identify whether they are being paid unequally and to support earlier resolution of disputes, reducing the need for tribunal proceedings.
- Reforming the process for pay discrimination claims. The government is considering changes to the procedural framework for bringing equal pay claims, with a view to making the process less burdensome, more accessible and more proportionate for both claimants and respondents. In particular, the government proposes the re-introduction of equal pay questionnaires which individual employees could use to establish whether they may have an equal pay claim.
- Establishing a new Equal Pay Regulation and Enforcement Unit. The government proposes to create a dedicated unit responsible for regulating and enforcing equal pay obligations. Crucially, the consultation envisages a meaningful role for trade unions in this unit, recognising the importance of collective worker representation in driving compliance. The unit would also be empowered to order Job Evaluation Systems and Equal Pay Audits where there is a reasonable suspicion that discriminatory pay practices may exist.
The second phase builds on phase one and focuses on extending and strengthening existing protections. The proposals under consideration in phase two include:
- “Levelling up” protections against pay discrimination on grounds of race, disability and sex. This delivers on the Make Work Pay commitment but instead of extending equal pay rights to ethnic minority and disabled workers, the government intends to “level up” and align their protections more closely with those currently available on grounds of sex.
- Requiring employers to take reasonable steps to uphold pay equality in outsourcing arrangements. This addresses what the government believes to be a significant gap in the current law. Under existing rules, the government is concerned that outsourcing of services has been used by some employers to insulate themselves from equal pay liability. The government proposes to close this loophole by requiring employers to take reasonable steps to ensure that outsourcing decisions do not undermine pay equality.
Don’t forget mandatory pay reporting…!
The government has also taken the opportunity to reaffirm its commitment to delivering mandatory ethnicity and disability pay gap reporting. Whilst the detail of that regime is not the focus of this consultation, the government’s restatement of intent is significant and employers should continue to plan for its introduction (see our previous commentary on this here).
Separately, the government has confirmed that it will publish a full analysis of responses to the call for evidence on equality law in due course. This is likely to inform further reform beyond the scope of the current consultation, and organisations should monitor developments closely.
Next steps
The consultation closes on 27 October 2026. While the consultation is comprehensive and the proposals are significant, the government rightly acknowledges that it is essential that employers and employees have the time and resources to prepare for any changes. The government therefore intends to follow a phased process with extended and staggered implementation before any measures are commenced and it will use the responses to the consultation to inform next steps.
If you would like further guidance on how these proposed changes may affect your organisation, please do not hesitate to contact a member of the Employment team.
A copy of the government’s consultation can be accessed here.
For further information, please contact:
Laurie Ollivent, Linklaters
laurie.ollivent@linklaters.com
