Great Britain’s equal pay overhaul:  what should reward teams be watching for?

Karen takes a look at the Government’s Consultation on Equal Pay.

The Government has opened its consultation on equal pay and pay discrimination, and it sets the stage for a significant reshaping of the current framework. The consultation runs for 15 weeks, covers Great Britain (“GB”), and asks 82 questions. Northern Ireland has its own equality and discrimination laws. For those working in reward and HR, the consultation paper is worth taking a look at now rather than getting caught up in the read later pile.

What follows here is a summary and an appraisal of where we think the risks sit for our members.

The diagnosis being attended to

The Government's argument is blunt and effectively states that the current system for ensuring equal pay and avoiding pay discrimination,  is broken for everyone. There are more than 10,000 claims a year, cases can grind on for a decade, enforcement rests almost entirely on individual claimants deciding to bring a claim, and there is a lack of reliable data to identify discriminatory pay before it becomes a dispute. The Government also says that the framework leaves gaps such that disabled people, ethnic minority workers and outsourced workers do not get the protection that women do under the sex-based equal pay scheme.

The proposed reform is based on a sequence of two phases. Phase 1 fixes the existing system; Phase 2 broadens protection only once Phase 1 is working.

Phase 1:  the near-term changes

Pay transparency in recruitment. A statutory duty to publish pay information in job adverts, or to give it in writing before interview where there is no advert. The precise requirement and details would be set later by regulations. i.e. should it be  a range, a specific salary, a benchmark, and what should be shared beyond base pay.

Tougher consequences on finding of breach. Tribunals would be required to order an equal pay audit in almost all breach cases. To date, only one such audit has ever been ordered, because the current exceptions are so broad. Where a non-discriminatory job evaluation scheme is not already in place, the tribunal would have to order one to be established.

A reinstated statutory questionnaire for pay discrimination cases (the general version was repealed in 2013), letting potential claimants extract pay information early, with adverse inferences available for evasive or absent answers.

A new Equal Pay Regulatory and Enforcement Unit. A manifesto commitment for Labour, and the part that would change the character of the current regime most. It would move enforcement from reactive individual litigation towards proactive regulation with the unit having powers to:  compel pay data before opening a formal investigation; require a job evaluation scheme or audit during one, and to demand responses to its recommendations. Alongside this, the EHRC’s statutory Code of Practice,  last revised in 2016,  would be replaced, and the "material factor defence" clarified.

Phase 2: the wider expansion

Phase 2 would encompass a levelling up protection for race and disability to broadly match the sex-based scheme. The most consequential element is allowing "equal value" and "rated as equivalent" claims on the grounds of race and disability. This is not currently possible. There are also two technical but significant changes to the equal pay scheme itself: permitting hypothetical comparators in two narrow scenarios [*1]  and giving tribunals discretion to extend the current six-month time limit.

And there would be an outsourcing duty. This would be a requirement on everyone in a contracting chain -  principals, intermediaries, service providers -  to take "all reasonable steps" to uphold pay equality, closing off outsourcing as a route to sidestepping equal pay obligations.

Where the risks sit for our members

Transparency in adverts sounds simple, but it isn't. The Government leans on the claim that most employers already publish ranges, so the burden of change is low. That claim is likely unfounded. Publishing a range externally is only safe if the architecture behind it is defensible. If your ranges are wide, inconsistent, or not underpinned by proper job evaluation, transparency exposes that  to candidates, to your existing workforce, and potentially to a tribunal. Plan for the principle now,  knowing that the detail will come in later regulations.

Job evaluation is back under the spotlight. The proposal that a tribunal must order a non-discriminatory job evaluation scheme on a finding of breach should make every reward leader ask a hard question: could we stand behind ours? Many grading structures were never built on an analytical, non-discriminatory scheme. That is a latent risk the moment any equal pay question is raised.

The enforcement Unit changes the territory. This is what I would watch most closely. A regulator that can request pay data on reasonable suspicion, before any formal investigation, is a regulator that can look under the bonnet of the way your organisation does things. If your pay data is messy, incomplete, or slow to produce cleanly, that becomes an operational risk and not a reporting headache.

Phase 2 widens the net considerably. Extending equal value claims to race and disability is a substantial change. Most organisations have analysed pay through a gender lens at best. Very few have asked whether work done disproportionately by disabled or ethnic minority employees is undervalued against comparators. That analysis will be coming, and the data and tools to do it credibly take time to build and will likely need additional investment.

Outsourcing reaches further than you may think. If you are a principal, or anywhere in a contracting chain, the "all reasonable steps" duty applies to you. Expect to be asked to request and scrutinise pay and demographic data from your suppliers.

The European dimension

Many of you already have working knowledge of pay transparency through activities in Europe. The EU Pay Transparency Directive's transposition deadline passed on 7 June 2026, and the picture is fragmented with only four of the 27 member states meeting the deadline (Slovakia, Italy, Lithuania, Malta), with the rest at varying stages of catching up. If you operate across the EU, you are already planning for pay ranges in adverts, a ban on asking candidates about pay history, gender pay gap reporting, and a shift in the burden of proof onto the employer.

I think there is the potential of a trap. It is tempting to assume that if you have done the European work, GB will follow the same shape and you are covered. Don't. GB is consulting on its own regime, and the detail of  what must be published, the thresholds, who enforces and how,  may diverge. You could find yourself running two different processes:  directive-compliant based practice in your European entities and a separately specified GB regime here.

The strategic response, though, is the same: defensible pay architecture, job evaluation you can stand behind, and clean, produceable pay data. Build that structure for your European operations and you are in a strong position whichever way the detail lands in the GB.

What next

This is exactly the kind of change our members should be shaping, not simply waiting for. The consultation is open, and reward and HR specialists are explicitly named as a group the Government wants to hear from: Consultation document (HTML) - GOV.UK

The consultation closes at 5pm on 27 October 2026. It opened on 14 July 2026 and runs for 15 weeks

Notes:

[*1]:  A "comparator" is the person an equal pay claimant measures themselves against. You can't just assert you're underpaid, you have to point to someone doing equal work who's paid more. The significance for the consultation is  about who can serve as that comparator.

Under the current equal pay scheme, the comparator has to be an actual person -  a real individual of the opposite sex, doing equal work, employed at the same time. You cannot argue "if a man were doing my job, he'd be paid more." That "if there were a man…" figure is a hypothetical comparator, and equal pay law doesn't allow it. Oddly, ordinary direct discrimination claims do allow hypothetical comparators and this is one of the inconsistencies the consultation is trying to iron out.)

The proposal permits a hypothetical comparator, but only in two tightly defined situations. And the important subtlety is this: in both cases the comparison is still anchored to a real person but not one who was in post at the same moment.

The two scenarios are:

1. The successor comparison. A woman leaves a role, or moves to a different one, and a man is then hired into the same role on higher pay. Today she can't compare herself to him, because they were never employed at the same time. The proposal would let her argue she should have been paid what her male successor is now paid, for the same work she was doing.

2. Pay uplift triggered by a new hire. A woman is in a role; the employer hires a man to do the same work but pays him more; then raises her pay to match his, for parity. That uplift is itself the tell as it's evidence she was underpaid before he arrived. She could claim she was entitled to the higher pay before his hiring, with sex a contributing factor in the original gap.

Why keep it to just these two? Because opening the door to fully hypothetical comparators i.e. "what would a man have been paid" with no real person behind it,  would make claims dangerously speculative. Equal pay works by comparing contracts term by term, and you can't do that against someone who never existed. The Government's own reasoning is that this would balloon the cost and complexity of cases, so it has deliberately confined the change to two scenarios that still rest on a flesh and blood individual.

What it means for you. This is a Phase 2 change, so not imminent,  but it does quietly widen exposure. Two situations that are effectively unchallengeable today become live: paying a replacement more than the person who left, and levelling someone up to match a new hire without addressing what they were paid beforehand. Both are common, often unremarkable pay-management decisions. Under this proposal, each becomes a potential equal pay claim with a backward look at the earlier underpayment. It's worth flagging to reward teams that "we corrected it when the new person arrived" may stop being a clean answer and start being evidence against the organisation.