As we approach the deadline to transpose the EU’s Pay Transparency Directive (“PTD”) on 7 June 2026, pay transparency is a topic that is currently at the forefront of European employment law reform. Post-Brexit, there is no obligation on the UK government to implement the PTD. Yet recent signals from the UK government suggest that, while formal alignment with the Directive is not expected, the underlying policy direction is, nonetheless, beginning to travel across the Channel.
Those familiar with the PTD will recognise its core requirements: the obligation to provide pay information before employment (including the starting salary or pay range in job adverts); the right for employees to request pay information, including that of colleagues performing the same or equivalent work; and the requirement for employers above a certain size to report on gender pay gaps within their organisation. These are the hallmarks of the new EU regime. When considered against developments in the UK – including recent equality action plan guidance and the consultation on mandatory disability and ethnicity pay gap reporting – the parallels between the EU and UK approaches are difficult to ignore. Which raises an interesting question: even though the UK is under no obligation to implement the PTD, are there nonetheless signs that it is moving towards a broadly similar framework?
The UK Government’s Equality Action Plan Guidance
In early March 2026, the government published (and updated on 7 April 2026) guidance on equality action plans, directed at large employers and intended to sit alongside the UK’s existing gender pay gap reporting framework. One of the 18 recommended actions included within that guidance is “increase transparency for pay ” – a phrase that is closely associated with the PTD.
The concept of equality action plans was introduced under the Employment Rights Act 2025 (“ERA”) and requires employers with 250 or more employees to publish plans alongside gender pay gap reports that outline the measures they have in place to address their gender pay gap and support employees during menopause. This is voluntary for gender pay gap reports due by April 2027 but is expected to be mandatory in subsequent years.
The action recommended by the UK government to increase pay transparency echoes some of the PTD’s headline requirements. Employers are encouraged to consider increasing transparency around pay, promotion and rewards by:
- including pay information in job adverts
- stating if pay, leave or development is negotiable
- making all internal promotion and transfer opportunities visible to everyone
- sharing how the company makes decisions about which pay band a job is in
- listing the criteria and processes the company uses to make decisions for promotions, salary reviews and bonuses.
The guidance also recommends that companies seeking to increase transparency within their organisation should question and account for current pay setting, and how the value of a job has been determined. This may require companies to look more closely at how pay levels, promotions, salary reviews and bonuses are decided, and also review how jobs are classified. Concepts that will be familiar to EU-wide organisations currently on their compliance journey towards PTD readiness.
In April 2025, the UK government ran a call for evidence to shape possible future equality law reform, which sought views on improving pay equality and transparency. Measures discussed in the call for evidence included banning employers from asking job applicants about previous and current pay, requiring employers to include pay information in job adverts, the provision of pay information to employees and how it compares to those doing the same work or equal value work. It remains to be seen whether the measures proposed in the call for evidence, which are notably similar to those in the PTD, will translate into future legal obligations.
For now, however, none of the above measures or examples provided by the UK government are currently legal obligations in the UK – but their appearance in official guidance signals that the UK government is beginning to nudge employers in that direction.
However, the equality action plans guidance, as it stands, does not impose binding obligations. It does not give employees new legal rights to request pay information from their employer (something the PTD does require), and it does not introduce any enforcement mechanism. Employers who do nothing in response to it will not, at least for now, face any legal consequences.
Government Consultation on Mandatory Disability and Ethnicity Pay Gap Reporting
In addition, the UK government has also recently published its consultation response setting out its approach to introducing primary legislation and supporting regulations on mandatory disability and ethnicity pay gap reporting, building on the existing framework for gender pay gap reporting that has been in place since 2017.
This consultation is significant for several reasons. First, it demonstrates that the government is committed to extending the pay reporting architecture it already has to improve transparency. Second, the government’s response to the consultation signals that it intends to take forward all but one of the proposals set out in the consultation, with next steps being to develop legislation to introduce mandatory disability and ethnicity pay gap reporting, as well as guidance and practical tools to help employers with the new reporting requirements. And lastly, each extension of pay gap reporting tends to generate renewed scrutiny of why gaps exist – and that scrutiny tends to pull, over time, towards greater transparency about pay structures and decisions. Once employers are required to report on a gap, there is an almost inevitable logic that leads to questions about what information employees should have access to in order to understand where they sit within that structure.
Looking Ahead
It would be premature to say that full pay transparency legislation (similar to the PTD) is imminent in the UK. The government has not announced any certain policy document or white paper to introduce the kind of comprehensive framework the PTD requires, and the current approach remains firmly in the territory of guidance and consultation rather than hard law.
But the trajectory is clear. The equality action plan guidance recommending increased pay transparency, the introduction of mandatory ethnicity and disability pay gap reporting, and the broader political context all point in the same direction. Pay transparency – in some form, to some degree – appears to be coming to the UK. The questions are when, how far it will go, and whether it will be done in a coherent, well-resourced way that can achieve its goals.
For employment lawyers and HR professionals, now is a sensible time to begin assessing how existing pay structures and policies would fare under a more transparent regime. Waiting for legislation to arrive before doing that work is likely to be a less comfortable experience, especially when viewed in light of the many delays that are happening across the EU with regards to transposition of the PTD.
For further information, please contact:
Aimee Friend, Bird & Bird
aimee.friend@twobirds.com
