Equal Pay

Policy

The Government has indicated that it wants to tackle equal pay.

The Next Steps and Plan to Make Work Pay documents set out reforms in respect of equal pay that will be delivered through the Equality (Race and Disability) Bill and so are not included in the Employment Rights Bill. A call for evidence seeking views on making the right to make equal pay effective for ethnic minority and disabled people and other areas of equality law that will shape the contents of the Equality (Race and Disability) Bill was launched on 7 April 2025 and closes on 30 June 2025.

The proposed reforms include:

• Extending the ability to bring equal pay claims to ethnicity and disability. This is currently limited to sex, although of course individuals currently have recourse by bringing a direct or indirect discrimination claim for these protected characteristics depending on the circumstances. The call for evidence suggests that the Government is considering whether the existing equal pay scheme provides the right model for these expanded equal pay rights, whether these rights should instead be given force by an amended version of the scheme or whether a different approach may be best. As part of this, the Government has said it is giving particular attention to whether the rules of procedure governing how equal pay claims are heard and the use of job evaluation schemes could be simplified or adjusted for these claims.
• Changing equal pay law to ensure that outsourcing of services can “no longer be used by employers to avoid paying equal pay.” The detail of this has not been set out for certain, but the call for evidence indicates that the Government is exploring “enabling comparisons between outsourced workers and ‘in house’ employees in equal pay claims”. The Government explains that the term outsourced workers could cover a broad range of scenarios including traditional outsourcing of services through an external service provider, the use of arrangements such as subcontracting, umbrella companies, labour providers or employment agencies. This may involve employees working for a principal company being transferred to an external provider to provide a service and also scenarios where those workers have never been employed by the principal company. The Government is also seeking views on where liability should lie for equal pay claims made by outsourced workers.
• Implement a Regulatory Enforcement Unit for equal pay with involvement from Trade Unions (see the enforcement section).

The recent call for evidence on 7 April 2025, also seeks views on improving pay transparency to see whether additional pay transparency measures, similar to some of the measures set out in the Pay Transparency Directive in the EU, to improve pay equality not only on the basis of sex and also race and disability. The call for evidence is also seeking views on the effectiveness of the current regime under the Equality Act 2010 (Equal Pay Audits) Regulations 2014, whereby employers who have been found by an Employment Tribunal to have committed an equal pay breach are required to carry out an equal pay audit in certain circumstances. It is considering whether the requirements to undertake equal pay audits should be expanded to cases where pay discrimination has been found in relation to race and disability, alongside sex and maternity.

---

Timing and developments

Not included in the Employment Rights Bill.

Call for evidence launched on 7 April 2025 in respect of the provisions to be included in the Equality (Race and Disability) Bill, closes on 30 June 2025.

Await developments.