Government launches consultation, inviting businesses, workers, and civil society to help shape the next steps on equal pay reform
- Further progress being made on commitment to end pay discrimination
- Businesses, workers, and trade unions to have a say on equal pay reform
- 15-week consultation aims to root out unfairness from the equal pay system so that it works for everyone
Businesses, public bodies, trade unions, and civil society organisations across Great Britain are being invited to help shape the government's next steps on equal pay reform.
This comes as today's release of the pay discrimination-related findings from the call for evidence on equality law, along with wider research , demonstrates that the existing law on pay equality has become excessively complex, costly, and protracted.
With thousands of claims stuck in the system, the findings illustrate that despite current legal protections, pay discrimination persists for ethnic minority and disabled people, women and outsourced workers.
Neither workers or employers currently benefit from this, as the findings show the current equal pay framework has created court and tribunal proceedings that are too complicated, expensive, and slow, often taking decades to resolve.
In response, the government has today launched a consultation to invite views from key stakeholders on how best to fix the equal pay system, based on the government's commitment to strengthen equal pay provisions and eliminate pay discrimination.
The consultation will invite insights on the government's approach to make the right to equal pay effective for ethnic minority and disabled people, establish an equal pay regulation and enforcement unit with the involvement of trade unions and ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay.
These reforms will not only deliver greater equality in the workplace, but they will also help businesses find the right people for roles, boost productivity, and incentivise employers to act in good faith. The government is inviting views to ensure it takes the right approach to deliver these reforms - consulting with businesses, trade unions, and civil society to make sure it gets the detail right.
Seema Malhotra MP, Minister for Equalities, said:
The Equal Pay Act was a huge achievement. But 50 years on, it is clear that this landmark legislation needs reform to ensure it works for everyone. The current equal pay framework is too slow, too expensive, and puts too much pressure on workers, businesses, and the justice system.
This government is committed to ending pay discrimination, and making work pay. That is why we are launching this consultation, so we can work with businesses, workers, and trade unions to level up protections for women and make the system fairer for ethnic minorities.
Fixing equal pay is key to this plan. Fairer workplaces are more productive and better for the economy and society. That is why it is vital we do this properly and get this right.
Rt Hon Sir Stephen Timms MP, Minister of State for Social Security and Disability, said:
Boosting opportunity and championing the rights of disabled people are at the heart of what this government wants to achieve.
Part of that commitment means eliminating unfairness in the workplace for disabled people. Through this consultation, we'll hear from organisations around the country on how best to make that commitment a reality.
This consultation is an important next step in this government's plan to fix the system by ensuring equal work should mean equal pay, regardless of your background.
Kate Dearden MP, Employment Rights Minister, said:
Equal work must be fairly rewarded because we know paying a fair wage leads to better living standards, which in turn leads to increased productivity, innovation, and the ability for firms to attract and retain the talent they need.
We're partnering with employers, workers and trade unions to ensure fair pay forms the foundation of a high-skilled, high-productivity economy.
The first phase of the government's approach seeks to fix the foundations of the system, which currently does not deliver for business or workers, and is placing burdens on the justice system. This approach includes consulting on:
- increasing transparency of pay practices to prevent discrimination before it happens
- reviewing and reforming the process for pay discrimination claims to ensure they are faster, fairer, and more cost-effective
- establishing a new Equal Pay Regulation and Enforcement Unit, with potential strengthened powers to uphold equal pay law
The second phase will build on the first by broadening protections to close gaps in the law and create a strong system for the future. In order to deliver this, the government will hear from stakeholders on:
- broadly levelling up protections against pay discrimination on the basis of race, disability, and sex, to ensure that work pays
- requiring employers to take reasonable steps to uphold pay equality in outsourcing arrangements
The consultation will be open for 15 weeks.
Paul Nowak, TUC General Secretary, said:
The principle of equal pay is fundamental for equality. It ensures that women - who often work in historically undervalued sectors - get fair pay compared to their male colleagues.
Yet despite equal pay legislation having been introduced over 50 years ago, pay discrimination remains widespread.
That's why we welcome the government's consultation on reforming the equal pay system to make sure it's fit for purpose.
And expanding the system on the basis of race and disability status is a step in the right direction.
Trade unions stand ready to work with the government to make sure the new system delivers for working people.
Sandra Kerr CBE, Race Equality Director at Business in the Community, said:
Business in the Community welcomes this consultation as a constructive opportunity to reset the balance on equal pay.
Fairness, transparency, and accountability are more than just HR buzzwords; they are the bedrock of what helps businesses attract and retain talent by building inclusive workplaces.
We are ready to get involved with this consultation and champion an approach that delivers for businesses of any size.
Penny East, Chief Executive at Fawcett Society said:
Ending pay discrimination and strengthening pay transparency measures, alongside fully enforced pay gap reporting, is an essential part of women's economic empowerment.
This consultation is a huge opportunity to gather views that will help strengthen pay transparency and end pay discrimination. When women are paid equally, treated fairly, and are fully aware of salary information, it benefits employees, workplaces and our wider economy.
Katharine Sacks-Jones, Chief Executive at Young Women's Trust, said:
We welcome the government's commitment to tackling unequal pay and breaking the culture of secrecy around salaries. Young women are still earning around a fifth less than young men from the start of their careers, and this pay gap is compounded when salaries are based on what they've earned before. Without faster action, equality is still decades away. This consultation is an important opportunity to get the detail right for both employees and businesses in order to deliver real, lasting change for women across the country.
The Baroness Lawrence of Clarendon OBE, Chair of the Race Equality Engagement Group, said:
Your background should not determine how far you can go. Strengthening equal pay protections for ethnic minorities is essential to creating workplaces where everyone is able to succeed and thrive.
As Chair of the Race Equality Engagement Group, I am pleased to see this consultation launch today. It represents an important opportunity to hear from stakeholders on how government can help create an equal pay system that delivers for ethnic minorities.
Baroness Harman, the Prime Minister's Adviser on Women and Girls, said:
Everyone deserves to be paid fairly for equal work. The Equality Act established important protections, but it is right that we continue to step up enforcement to ensure that discrimination does not cheat people out of what they should be rightly paid.
This consultation is an important opportunity to consider how greater pay transparency and a better system can help make equal pay a reality, levelling up protections for women, ethnic minorities and disabled people.
Notes
Alongside the launch of the equal pay consultation, the government remains committed to delivering on the mandatory ethnicity and disability pay gap reporting. The government will publish a full analysis of responses to the Call for Evidence on Equality Law in due course.
As part of this work, OEO commissioned:
- the University of Birmingham and the Equal Rights Trust to undertake socio-legal research on equal pay and ending pay discrimination
- the Public Service Consultants (PSC) to undertake lived experience research on equal pay and ending pay discrimination
- the Gender Pay Gap Decomposition Report
The government has launched a new campaign to help back British business ahead of new changes to employment law coming into effect this year: New employment rights: Guidance for businesses and workers . The government will continue to work with business groups to ensure employers know what is changing when.
For the purposes of this consultation, the term 'outsourced workers' is used to include all workers whose labour is obtained by an organisation ('the principal') through one or more external intermediaries. A principal is defined as the company or organisation that commissions and receives the work or services. While not a term defined in UK law, 'outsourcing' broadly describes arrangements where a principal contracts with an external service provider (such as an agency, contractor, umbrella company, or labour provider) to supply labour or perform specific work activities.
