Equal pay reform: What employers need to know about the Government’s new proposals

The Government has launched a major consultation on reforms to equal pay and race and disability pay discrimination under the Equality Act 2010. The proposals would significantly expand employer obligations, strengthen tribunal powers, and introduce a new enforcement body. The consultation closes on 27 October 2026.

A shift in the equal pay landscape

The Government’s consultation sets out a two‑phase reform programme aimed at modernising and strengthening the UK’s sex-based equal pay framework. While the Equality Act 2010 already prohibits pay discrimination, the current system has long been criticised for being slow, complex and inaccessible, particularly for race and disability claims, which do not benefit from the same comparator rules as sex‑based equal pay claims.

The proposed reforms would reshape how employers advertise roles, evaluate pay structures and respond to discrimination claims, while introducing a new regulatory body with wide‑ranging enforcement powers.

Phase one: Strengthening the existing system

The first phase focuses on improving transparency and tightening compliance within the current legal framework. Key proposals include:

• Mandatory pay information in job adverts or before interview, helping candidates identify potential disparities early
• Expanded tribunal powers, requiring equal pay audits after a breach unless the employer has completed a compliant audit within the last three years
• Compulsory non‑discriminatory job evaluation schemes where tribunals find pay discrimination
• Reintroduction of statutory questionnaires, allowing tribunals to draw adverse inferences if employers fail to respond
• Creation of the Equal Pay Regulatory and Enforcement Unit (EPREU), with potential powers to demand evidence, audits and job evaluation schemes.

These measures aim to make pay transparency the norm and ensure employers take proactive steps to identify and correct discriminatory pay practices.

Phase two: Levelling up race and disability pay protection

The second phase would extend many sex‑based equal pay protections to race and disability claims, creating a more consistent and robust framework. Proposed changes include:

• Tribunal powers to modify contractual terms following successful race or disability pay claims, mirroring sex‑based equal pay outcomes
• Equal value and work‑rated‑as‑equivalent comparisons permitted for race and disability claims
• Limited use of hypothetical comparators, including comparisons with successors
• Tribunal discretion to extend time limits on a “just and equitable” basis
• A new duty on outsourcing parties to take reasonable steps to uphold pay equality, enforceable by EPREU.

These reforms would significantly broaden the scope of pay discrimination claims and increase employer accountability across diverse workforce structures.

What employers should be doing now

With reforms on the horizon, employers should begin preparing by reviewing pay structures, job evaluation processes and recruitment practices. Early action will reduce risk and ensure compliance once the new regime takes effect.

If you would like support reviewing your pay systems or understanding how the proposed reforms may affect your organisation, our Employment Law team can help.

The Government consultation ‘Open consultation: Equal pay and pay discrimination’ is here https://www.gov.uk/government/consultations/equal-pay-and-pay-discrimination#documents