Equality and equal pay

VOLUNTARY ONLY (Mandatory from date TBC in 2027)

Employers with 250 employees or more will be required to develop and publish equality action plans relating to gender equality – these are stated to include addressing the gender pay gap and supporting employees through the menopause. 

Government guidance has been published to support employers.

ONGOING (anticipated from date tbc in 2027)

• Consultation on regulations setting out the details of this proposal will take place.
• Gender equality action plans will be mandatory under ERA from 2027.

Note that large employers will also be required to name large providers they contract with for outsourced workers, with timescales for this measure dependent on broader changes to pay gap reporting, including progress of the Equality (Race and Disability) Bill. See Gender pay gap reporting and Contract Workers below. 

Action

• While the requirements are only voluntary at present, employers should use the opportunity to get ahead before the legal obligation to produce an action plan becomes mandatory from Spring 2027. The government's newly published step by step guidance sets out a clear process and a menu of suggested actions for employers to consider.
• Many employers are already producing and publishing gender pay gap action plans; employers should ensure that the steps they are taking comply with the new statutory obligation when it is in force.
• We are increasingly seeing employers tackling menopause in the workplace through policies, training and support groups. Steps being taken in relation to menopause should be reviewed and further steps identified in preparation for the new reporting duty.
• The guidance on creating an action plan under the voluntary regime sets out a clear process for employers to follow and suggested actions for employers to consider.
• Ensure that any data protection required complies with wider legislative, regulatory and data protection requirements.  
• Consider whether or not similar plans would be appropriate for other matters, such as menstrual problems and menstrual disorders, an area that was raised during the progress of the ERA through Parliament and the potential need for employers to recognise how it can support employees in this respect. 

In detail

• From 2027, employers with 250 employees or more will be required to develop and publish equality action plans setting out the steps they are taking in relation to "prescribed matters related to gender equality and to publish prescribed information relating to their plans". Prescribed matters include addressing the gender pay gap and supporting employees going through the menopause.
• From April 2026, employers with 250 or more employees can voluntarily publish an action plan alongside their gender pay gap data on addressing the gender pay gap and supporting employees going through the menopause.
• To encourage employers to take up the duty voluntarily, the government guidance sets out a clear process for employers to follow with five key areas of focus:
  • Understand the issues in the organisation: Begin by analysing the gender pay gap data to identify where the gaps are and what is driving them. Engage with employees to better understand their experiences and the specific challenges within the organisation. Use workforce demographic data where available to build a clear picture.
  • Selection actions: The government has published a list of 18 recommended evidence based actions that employers should be considering for their business, grouped into five categories: recruiting staff, developing and promoting staff, building diversity into the organisation, increasing transparency and supporting women with health conditions and menopause. Using the evidence gathered, businesses should choose the actions from the government's list that are most relevant to their organisation. They will also need to provide a supporting narrative explaining why they have chosen each action and what they hope to achieve. Employers must select at least one action from the menopause category and one from the gender pay gap categories but are strongly encouraged to aim to go beyond the minimum of one action in each area.
  • Get the right people involved: Senior leaders must sign off the plan and commit the necessary resources. Line managers need to feel confident supporting their teams on these issues. Employees, unions and HR teams should all have a voice in shaping the plan. Organisation wide buy in is essential for the plan to succeed.
  • Track and measure progress: Once the actions are in place, employers should put steps in place to monitor whether they are working. Further guidance on tracking outcomes will be published in April 2026 on the gender pay gap reporting service. Collecting and reviewing data regularly will help businesses demonstrate progress and refine their approach over time.
  • Review and report: Action plans will need to be submitted and published on the gender pay gap service. Organisations may also publish them on their own websites. The voluntary year runs until spring 2027, giving them time to test their approach before mandatory reporting begins. 

• In relation to the mandatory duty, regulations may make provision about:

  • The content of employers' gender action plans.

  • The form and manner in which the plan on information is to be published;

  • When and how frequently the plan or information is to be published or revised.

  • Requirements for senior approval before a plan or information is published.

  • Descriptions of employers, employees and information.

• After the first publication of an employer's gender action plan, it will not be required to publish information more frequently than every 12 months.

• Regulations may set out how a failure to comply will be enforced. The Next Steps paper states that a Regulatory Enforcement Unit will be set up to deal with enforcement; it is anticipated that this will be dealt with in the forthcoming Equality (Race and Disability) Bill. 

Impact

• The gender pay gap remains a real issue driven by unpaid caring responsibilities, differences in working patterns and the sectors women work in. The menopause is also having a tangible impact on it, with one in 10 women having left a job because of menopause related symptoms and a consequential loss of experience from the workplace.
• There is also a growing legal risk for employers to consider: while menopause is not itself a protected characteristic, it is increasingly being raised in employment tribunal proceedings, with employees bringing sex discrimination, disability discrimination and failure to make reasonable adjustment claims. Employers who fail to take meaningful steps to support employees through the menopause face increasing legal exposure, as well as grievances and other employee relations challenges. 
• At present employers with 250 or more employees are required to report via the government portal gender pay gap figures. Many employers also publish supporting narratives and action plans setting out measures they are taking to close the gap.
   
• The government has only indicated that it is currently focusing on gender pay and menopause. We may however see regulations introduced in the future covering other "gender equality" matters. The guidance emphasises that employers should look beyond gender in isolation and consider how employees may be disadvantaged in the workplace due to the overlapping impact of their sex with other characteristics such as socio-economic background, disability status and ethnicity.  
   
• The government's commitment to menopause support is highlighted in its recent appointment of a new Menopause Employment Ambassador to work closely with employers to improve workplace support for women navigating menopause, helping them stay in work and progress their careers. It has been reported that almost 70% of employed women aged 40-60 report menopausal symptoms having a negative effect on their work, with over 50% unable to go into work at some point due symptoms. 
• Employers should remember that the new action plan requirements sit alongside, but do not replace, existing obligations, including discrimination under the Equality Act 2010, health and safety requirements and the statutory duties in relation to flexible working requests (which themselves are subject to current reform). As well as reducing legal risk, a forward-thinking strategy (properly implemented and regularly reviewed and updated) will also help attract and retain talent, improve workplace culture and deliver real business benefits.                                                                                                                        

The government has confirmed its commitment to introduce mandatory ethnicity and disability pay-gap reporting for large employers, following its consultation in early 2025 and which demonstrated "widespread support for mandatory ethnicity and disability pay gap reporting by large employers to increase transparency and help tackle barriers in the workplace".   

Implementation Status

• Part of the Draft Equality (Race and Disability) Bill; awaiting publication.
• Consultation response published (March 2026).
• No formal timetable has been announced. It seems likely that the government will move forward with this reform swiftly, but it is unlikely that it will be enacted before 2027 at the earliest.
  
   

Action

• Employers who do not already report on ethnicity or disability pay gaps should start considering what steps they may need to take to prepare for this new legal reporting requirement, and how data will be collected in line with existing statutory and data protection requirements.
• Employers should look out for the draft legislation and also the tools and guidance which the government has committed to provide to support. The current voluntary guidance on ethnicity pay gap reporting provides a tool for employers to understand the specific complexities that ethnicity pay reporting brings. Disability pay gap reporting is likely to bring similar complexities.
• While the new reporting duties only apply to those with 250 plus employees, this is an area which all employers should have on their radar. Employers may also want to take the opportunity to address other potential pay inequalities existing within their organisation; for example, we are starting to see some employers reporting voluntarily on their socioeconomic pay gaps.
   

In detail

• In response to the consultation, the government has confirmed that it intends to implement the below proposals.

• Ethnicity and disability pay gap reporting will be aligned with the existing framework for mandatory gender pay gap reporting i.e. apply mandatory reporting to employers with 250 or more employees, use the same geographic scope, require the same six calculations, share the same "snapshot" dates for collecting pay information and statutory reporting dates, require employers to upload their ethnicity and disability pay gap data to an online service and be subject to the same enforcement mechanisms. 

• However, employers will also be required to report on the overall comparison of their workforce by ethnicity and disability (referred to as "workforce reporting") and the proportion of their employees who have declared their ethnicity and disability data. 

• The government proposes a tiered approach to ethnicity pay gap calculations. At a minimum, employers must report using a "binary classification" of White (including White Other) and all other ethnic groups. Where numbers permit, employers will also be required to report comparisons between the five broad ethnic groups set out in the Office for National Statistics guidance. The government is considering the minimum threshold for reporting on groups so as to protect confidentiality and produce statistically robust data in line with GDPR requirements. The current indications are that this will be ten (but it is still to be confirmed).

• In respect of disability a binary approach to reporting is proposed; this may lead to distortions, given the inevitably wide scope of conditions falling within the Equality Act 2010 definition of disability (for example, individuals with a range of physical and mental health conditions may meet the definition, with some conditions automatically deemed to be disabilities, as well as those who are neurodivergent) and the different impacts different disabilities have on day-to-day work. The government has indicated that it will "future-proof" the legislation to provide for more granular disability reporting, should it become apparent that this is appropriate.

• Employers will be required to take actions to address any ethnicity and disability pay gaps, in line with the plans being taken forward to introduce equality action plans on gender and the menopause. The government's ultimate aim is for employers to produce a single equality action plan on the same online service when all the reporting requirements are in place.
• The consultation response features suggested clauses for the new legislation. The government will continue to develop the legislation, including supporting regulations, setting out the detailed reporting requirements.
• The government has confirmed that it will provide guidance and tools to support employers in implementing the new obligations, including guidance on improving employee declaration rates on ethnicity and disability, performing the required calculations and advice on actions to address pay gaps identified within the organisation. 
   

Impact

• The benefits diversity and inclusion brings to an organisation are well recognised; the previous government published guidance providing for voluntary ethnicity pay reporting recognising that "there is still more to be done to remove barriers to entering the labour market and to ensure pay and progression in the workplace is fair for all ethnic groups" and that "ethnicity pay reporting is one of the tools employers can use to build transparency and trust among their employees".

• In November 2018 the previous government published a voluntary framework to encourage businesses to report how many of their staff have a disability or health condition and their health and wellbeing.

• The government's announcement confirms that this forms parts of its wider commitment to break down barriers to work, including a £3.5 billion package of employment support by the end of the decade to help more sick or disabled people into work.

• The outcome of a separate government call for evidence which sought views on making the right to equal pay effective for ethnic minority and disabled people, together with strengthening other areas of equality law, is still awaited.
• International employers with operations in the EU should also note the impact of the EU Pay Transparency Directive and which Member States are required to implement into national law by 7 June 2026. The directive introduces far-reaching obligations such as pre-employment pay transparency, objective and transparent pay setting and progression criteria, employee rights to information on individual and average pay by gender for comparable roles and gender pay reporting potentially giving rise to a need to carry out joint pay assessments. The directive does not however extend to ethnicity and disability pay gap reporting. 
          

In a recent call for evidence, the government has looked at how to bring the existing provision in the Equality Act 2010 on combined discrimination into force.

Implementation Status

• If progressed, it is likely to be part of the Draft Equality (Race and Disability) Bill – to be published during the current parliamentary session for pre-legislative scrutiny. 
   

In detail

• We are waiting for the outcome of the recent Call for Evidence. 

Impact

•  At present, the Equality Act 2010 only protects individuals on the basis of each protected characteristic i.e. an individual is female and an individual is old – as opposed to an individual being able to claim discrimination on the basis that the acts in question are because they are an older woman i.e. a younger woman or an older man would not have received the same treatment.