By Hilary Larter, Sara Meyer and Josh Hornsey
|Published 11 August 2026
The government has published the outcome of its call for evidence on equality law (which we reported on here), alongside a wide-ranging consultation on reform of equal pay law. The proposals cover pay transparency, enforcement, race and disability pay discrimination, and outsourced workers.
The Equality Act 2010 implies a sex equality clause into employment contracts. A worker whose contractual terms are less favourable than those of an opposite-sex comparator doing equal work can bring an equal pay claim. If the claim succeeds, the employment tribunal can require the employer to pay arrears and amend the worker’s terms to match the comparator’s. Equal work includes work that is the same or broadly similar, work rated as equivalent under a job evaluation scheme, and work of equal value. An employer can defend an equal pay claim by showing that the difference in pay is due to a non-discriminatory material factor.
The government believes the current equal pay framework is too complex and relies too heavily on individuals bringing claims. It also notes that most respondents to the call for evidence on equality law agreed that the current framework provides greater protection for sex-based pay discrimination than for workers who experience pay discrimination because of race or disability, and that outsourced workers are often paid less than directly employed staff. The government intends to address this, by providing these workers with protection that is comparable to the sex-based equal pay regime.
The government is proposing to change the law in phases.
Phase 1 is entitled "Fixing the System". It would introduce greater pay transparency and stronger enforcement of existing equal pay law.
Pay transparency in recruitment: Employers could be required to include pay information in job adverts or, if there is no advert, provide such information to candidates in writing before interview. The consultation asks what information employers should be required to disclose, e.g. salary, pay range, benchmark rates, bonuses, etc.
Equal pay audits and job evaluation schemes: Under the current law, where an employment tribunal finds that an employer has breached equal pay law, it must order the employer to conduct an equal pay audit, unless certain exceptions apply. The consultation notes that only one equal pay audit has been known to be ordered by a tribunal. In order to promote the use of equal pay audits, the government therefore proposes removing most of the existing exceptions.
The government is also proposing to introduce a requirement for a tribunal that has found a breach of equal pay law to order an employer that does not have an up-to-date job evaluation scheme to conduct one. This is intended to help ensure that the required equal pay audit is based on accurate data.
Procedure rules and expert panels: The consultation acknowledges that equal pay litigation is currently too complex, costly and time-consuming. The government is particularly concerned about delay in equal value claims, and the availability of experts who can advise the employment tribunal on such matters. The consultation notes that the government is therefore proposing to launch formal reviews into the rules of procedure for pay discrimination claims and the operation of independent expert panels. The reviews will be completed before any new protections concerning race, disability, or outsourced workers are introduced.
Pay discrimination questionnaire: The government intends to introduce a new statutory questionnaire which would allow a potential claimant to request pay information before or during pay discrimination proceedings. This would operate in a similar way to the statutory questionnaires that used to be available to claimants in all discrimination proceedings under the Equality Act 2010. Although employers would not be required to answer, a tribunal could draw an inference from a failure to respond within the prescribed period or from an evasive or equivocal answer. The consultation asks what questions should be included and how the process could be kept proportionate.
Enhanced enforcement: The government also proposes the creation of an Equal Pay Regulatory and Enforcement Unit. It seeks views on where the Unit should sit (e.g. within the Equality and Human Rights Commission, or within the Fair Work Agency). It also seeks views on what powers the Unit should have. For example, it asks whether the Unit should have power to obtain evidence before a formal investigation, require an employer to carry out an audit or job evaluation scheme, and follow up on recommendations made after an inquiry. The consultation also states that the Unit would issue guidance for employers on the material factor defence.
Phase 2 is entitled "Making the right to equal pay effective for all". Under this phase, the government would bring the protections available for sex, race and disability pay discrimination closer together.
Race and disability pay discrimination: Whereas claims concerning contractual pay discrimination based on sex must largely be brought as equal pay claims, claims involving race or disability discrimination related to contractual pay can be brought as direct or indirect discrimination claims (or, in disability cases, as claims for discrimination arising from disability or failure to make reasonable adjustments). The government aims to "level up" protection to make it broadly equivalent across both regimes. For race and disability claims, the government therefore proposes allowing comparisons between different jobs that are rated as equivalent or are of equal value, giving tribunals power to amend discriminatory contractual terms, and extending the requirements for equal pay audits and job evaluation schemes. For sex-based equal pay claims, it proposes allowing hypothetical comparators in two limited situations and giving tribunals discretion to extend the time limit where it is just and equitable to do so.
Promoting pay equality in outsourced contracts: Under the current law, outsourced workers cannot bring equal pay claims based on the higher pay of directly employed workers. The government's outsourcing proposals would require each party in a contracting chain to take all reasonable steps to secure pay equality in their contractual arrangements. The proposed Enforcement Unit would enforce the duty. The consultation notes that the duty is not intended as an automatic requirement to equalise pay across different employers, and that what steps are reasonable will vary depending on the circumstances, including each party's size and resources. Individual workers would not be able to bring a claim for breach, and although the tribunal could order an employer to take steps to prevent future inequality it could not award compensation under this duty.
The consultation proposes a radical overhaul of the equal pay framework. While changes that effectively streamline the system and reduce complexity are likely to be welcomed, some of the proposals have the potential to impose significant additional burden on employers.
Employers who wish to respond to the consultation should focus on the proposals that would most affect their organisation, explaining why the proposal may cause them difficulty and suggesting an alternative or safeguard where possible.
The consultation closes at 5pm on 27 October 2026. It is likely to be some time before any changes are implemented, but the government's intended direction of travel seems clear. In the meantime, therefore, employers may wish to consider assessing their current pay structures to identify any underlying equal pay or discrimination risks if they do not already do so.
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