The Government has said it wants to tackle equal pay and sees gender pay gap reporting as a way of achieving this. The ERA 2025 includes some measures in respect of gender pay gap reporting, with the remainder to be included in the Equality (Race and Disability) Bill.
ERA 2025 Changes
The ERA 2025 makes amendments to the Equality Act 2010 (both of which will be subject to regulations) to:
- Require large employers (those with 250 or more employees) to develop and publish equality action plans showing the steps they are taking in relation to their employees with regard to prescribed matters related to gender equality, which includes addressing the gender pay gap and supporting employees going through the menopause
- Introduce the ability to make regulations on the information about outsourced workers that needs to be included in gender pay gap reporting, including, “among other things,” the identity of the providers of contract workers with whom the employer engages
The Government published guidance on 4 March 2026 on equality action plans, which states that from April 2026, employers on the gender pay gap reporting service will have the option to produce and publish a voluntary action plan alongside their gender pay gap data. It notes that no employers are required to publish an action plan for the 2026 to 2027 reporting year (although are encouraged to do so), but these will become mandatory from Spring 2027 (subject to regulations).
The guidance includes a list of 18 recommended actions that employers may include in their equality action plans, including actions to support women with health conditions and menopause. According to the guidance, as part of developing an action plan, employers must choose at least one action to address their gender pay gap and at least one action that supports employees experiencing menopause, although they are encouraged to include more. Actions are grouped around: recruiting staff, developing and promoting staff, building diversity into an organisation, increasing transparency, and supporting women with health conditions and menopause.
Action plans will be required to be submitted and published on the gender pay gap service and will be publicly available. Employers may also choose to publish them on their own websites.
It is unclear if further menopause guidance will be published, and therefore this may not be the final position. However, the Government has confirmed that additional guidance for employers will be published in April 2026 on creating an action plan.
Further Reforms
Additional reforms to pay gap reporting, anticipated in the Equality (Race and Disability) Bill, include extending pay gap reporting (applicable to large employers with 250 or more employees) to include mandatory ethnicity and disability pay gap reporting. The Government opened a consultation on 18 March 2025, which is now closed, and has said responses to the consultation will shape the legislation. The consultation commits to introduce mandatory ethnicity and disability pay gap reporting for large employers, using a similar framework already in place for gender pay gap reporting but with distinct considerations for ethnicity and disability, particularly in data collection and analysis. The Government is currently proposing:
- To apply key aspects of the gender pay gap reporting rules to ethnicity and disability pay gap reporting, including using the same set of pay gap measures, using the same reporting dates, and applying the same enforcement policies.
- That data collection for race and disability would be best achieved by voluntary reporting, with employees able to choose ‘prefer not to say’.
- That covered employers should also have to report on the overall ethnic breakdown of their workforce, the breakdown of their workforce by disability status and the percentage of employees who did not disclose their personal data on ethnicity and disability.
- To introduce certain additional reporting requirements for public bodies, including in relation to recruitment, retention and progression.
- To apply a de minimis threshold for reporting on 10 employees in each ethnic group for ethnicity reporting and in each group being compared (e.g. disabled/non-disabled) for disability reporting for data privacy and identification reasons.
- Whether employers should report on ethnicity as a minimum, on a binary classification basis using one of three proposed methods, (e.g. comparing White British employees with all other ethnic minority groups combined).
- Whether employers should report on disability, using a binary approach reporting on differences in pay between disabled employees and non-disabled employees, rather than requiring reporting on the difference in pay between employees with different impairment types and non-disabled employees.
- Whether equality action plans should also be produced by employers about what they are doing to improve workplace equality for ethnic minority employees and for disabled employees.
Reporting on ethnicity and disability poses inherent challenges. People are often reluctant to disclose that they are disabled or do not accurately report their status because they do not to understand the legal definition of disability. Also, there is a tension between balancing the risk of being able to identify individuals, and reporting meaningful data, particularly where there are smaller data groups.
Timing and developments
Equality action plans for gender equality
Included in the ERA 2025.
Further regulations will be required as to the detail of the action plans (including the form and manner and how frequently they should be produced) and what information is required in relation to outsourced workers.
The Government’s updated timeline and guidance indicates that the measure regarding gender pay gap reporting and menopause action plans will be introduced on a voluntary basis on 6 April 2026 and then will formally take effect in spring 2027, although a specific date is not provided. The guidance suggests that for private companies, the first voluntary deadline for publishing an action plan will be 4 April 2027 (in respect of the 2026-2027 reporting year) and the mandatory deadline for publishing an action plan will be 4 April 2028 (in respect of the 2027-2028 reporting year), however confirmation is awaited in the regulations. The Government has confirmed that additional guidance for employers will be published in April 2026 on creating an action plan.
The Government’s updated timeline also indicates that menopause guidance will be provided on 6 April 2026. As noted above, some menopause guidance was published on 4 March 2026, but it is unclear if further guidance is expected. The guidance does note that from April 2026, organisations will be able to share evidence with the Government about actions taken and the Government will review and develop the actions to ensure they evolve alongside new evidence.
However, implementation of the gender pay gap outsourcing measure will be depending on timelines for the draft Equality (Race & Disability) Bill (further details will follow in due course).
Extending pay gap reporting to ethnicity and disability
Not included in the ERA 2025.
Consultation opened on 18 March 2025 and closed on 10 June 2025. The consultation will inform the provisions to be included in the Equality (Race and Disability) Bill. Timing for implementation is unknown.