Quick Hits<\/p>\n
The UK\u2019s Office for Equality and Opportunity is seeking public comments on how equal pay laws can do more to extend protections for ethnic and disabled workers and increase pay transparency, in a move indicating that the government wants the UK\u2019s pay equity policy framework to be competitive with EU member states\u2019 implementation of the EU Pay Transparency Directive.<\/p>\n
The consultation has two main phases: identifying weak points within the current system and extending existing rights and protections.<\/p>\n
The consultation closes on October 27, 2026. A full analysis of all the responses will be published after the close date.<\/p>\n
The UK\u2019s consultation is a result of the government\u2019s Make Work Pay plan, which is committed to extending the rights of ethnic and disabled workers. Additionally, this is part of a wider effort to increase salary transparency across the UK by including salary information in job postings. Currently, there is still ambiguity over whether this means exact amounts or salary ranges.<\/p>\n
Phase one of the consultation will target outdated, reactive, and costly structures. The government has proposed reintroducing equal pay questionnaires. This would make the equal claims process more accessible, as it would help employees understand if they in fact have a claim.<\/p>\n
The government also has proposed creating a new Equal Pay Regulation and Enforcement Unit within the Office for Equality and Opportunity. This body would be responsible for enforcing equal pay obligations and demand audits when they believe discrimination regarding pay is occurring.<\/p>\n
A lack of transparency surrounding pay exists in the UK. This leads to job candidates applying to roles they would not have considered if they were informed of the salary at the start. It also can lead to unequal pay, if those deciding levels of payment may show bias against women, ethnic minorities, or those with disabilities. Finally, ambiguity surrounding pay can lead to equal pay claims being brought to tribunals. More clarity surrounding pay would not only improve equality in compensation, but might also ease the burden on employers and the legal system long term.<\/p>\n
Phase two of the consultation is about extending and improving the existing regulations and legal protections. The focus is to increase protections against pay discrimination based on sex, race, and disability. There is a particular emphasis on ensuring that the protection of equal pay rights for ethnic minorities and disabled people matches the current system of protection based on sex.<\/p>\n
Furthermore, the government has indicated that employers can do more to foster pay equity in outsourcing arrangements. A disproportionate amount of contract workers (or outsource workers) are female, disabled, or from ethnic minority backgrounds. These workers typically cannot compare their salaries with those who are directly employed, and a significant pay gap exists. Thus, the government suggested that employers take more accountability in ensuring pay equity in outsourcing arrangements.<\/p>\n
The UK requires organizations with 250 or more employees to calculate and publish key pay metrics annually, showing the difference in average earnings between men and women.<\/p>\n
The EU Pay Transparency Directive<\/a> (Directive (EU) 2023\/970) provides crucial context for the UK\u2019s initiatives. One of the key areas of focus for the EU directive is increasing pay transparency both in the pre-employment stage and during employment. It is evident from the UK government\u2019s proposed changes that it wants the framework in the UK to be competitive and clear alongside EU member states<\/a>.<\/p>\n The UK government\u2019s proposals at this stage remain conservative when compared to the EU Pay Transparency Directive\u2019s baseline requirements. However, as an increasing number of EU member states publish drafts and implement the directive, we may see more harmony with the EU directive in the UK\u2019s policy.<\/p>\n Next Steps<\/p>\n After the October 27, 2026, deadline, there will be a staggered approach to suggested structural changes, giving employers enough time to make necessary changes. Employers in the UK may wish to examine their current policies and practices regarding pay equity and job postings to determine any changes that may need to be made in the future, depending on the UK\u2019s final legal regulations.<\/p>\n Global employers with employees in the UK that are trying to achieve a consistent approach across their whole business may wish to examine their current policies in the UK, as this consultation shows the likely direction of change in the law.<\/p>\n Ogletree Deakins\u2019 London<\/a> office, Global Reorganizations Practice Group<\/a>, Pay Equity Practice Group<\/a>, and Workforce Analytics and Compliance Practice Group<\/a> will continue to monitor developments and will post updates on the Cross-Border<\/a>, Global Reorganizations<\/a>, Pay Equity<\/a>, United Kingdom<\/a>, and Workforce Analytics and Compliance<\/a> blogs as additional information becomes available.<\/p>\n Daniella McGuigan<\/a> is a partner in Ogletree Deakins\u2019 London<\/a> office.<\/p>\n This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins\u2019 Washington, D.C., office<\/a>.<\/p>\n Follow and Subscribe
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