New Consultation On Pay Discrimination

The government has published a new consultation on equal pay and pay discrimination, which makes some significant proposals about attempting to fix the shortcomings of the current system and making equal pay more effective for disabled people and those from ethnic minority groups. Here’s our overview.

Back in April 2025, the government published a call for evidence on equality law. This included a number of questions about pay discrimination and pay transparency. The government has now responded to those aspects of the consultation. As we commented at the time, proposals to simply extend equal pay claims to cover ethnicity and disability did not seem to be an effective way to tackle the issues due to the shortcomings with existing equal pay law and legal procedures associated with such claims. The government’s response recognises that there is a need to address the failures of the current equal pay regime before extending aspects of it to other groups. The new consultation covers two main areas – fixing the current system through pay transparency and enforcement, and making the right to equal pay effective for all.

Fixing the current system

Pay transparency

The following proposals are put forward to attempt to make pay discrimination less likely to occur, and to give better tools to establish where it has happened.

• Pay transparency in recruitment. A new statutory requirement to publish information about pay and conditions in job adverts (or in writing before interview, if there is no advert). This is a significant proposal which will have widespread effect. We have written about it in more detail in the context of European and global pay transparency developments here.
• Job evaluations and equal pay audits ordered by the Employment Tribunal. The removal of most of the current exceptions to the requirement that the Tribunal should order an equal pay audit if an equal pay claim succeeds, plus the addition of a requirement to order a non-discriminatory job evaluation scheme. It is questionable how much effect this will have in practice, given how few equal pay claims end with a final finding in the claimant’s favour (or indeed the ordering of equal pay audits, the consultation noting that only one such audit has been ordered to date).
• Standard questionnaire in pay discrimination disputes. The re-introduction of a statutory questionnaire procedure to obtain information about pay, where the Tribunal can draw an inference of discrimination from an employer’s failure to answer. This process was available for all discrimination claims until 2013. There was criticism of the “old” questionnaire, and so the proposals also say that this questionnaire will be simpler than before and supported by guidance for employers.

Pay discrimination enforcement

There are also proposals to improve Employment Tribunal enforcement and set up a new enforcement unit.

• A review of the rules of procedure for pay discrimination claims – to try and reduce the complexity and length of equal pay litigation.
• A review of the operation of the independent panel of experts – to address concerns about the availability/capacity of equal value experts and lack of confidence that the system makes best use of their role.
• A new Equal Pay Regulatory and Enforcement Unit. This would be a new body with powers to prevent and enforce pay discrimination in relation to the current rules on equal pay, and where there is discrimination relating to sex, disability or race. It does not appear this would be extended to other protected characteristics as well. The consultation asks whether this Unit should be housed within the EHRC or somewhere else, and various questions about proposed new powers.

Making the right to equal pay effective for all

This looks at closing gaps in the current system, including equalising the treatment of those who experience pay discrimination on the basis of sex, race and disability. The consultation says that these measures will only be implemented once reforms to improve the current system have taken place.

Equalising the current law

The following proposals are put forward to “level up” pay protection based on race, disability and sex.

• Allowing an Employment Tribunal to require the modification of the term of a claimant’s contract which has been found to be race or disability discrimination (the equivalent of the sex equality clause that applies in equal pay claims).

• Extending the requirement for the Employment Tribunal to order an equal pay audit and job evaluation scheme to cases of race or disability pay discrimination.

• Allowing claims for pay discrimination where work is not materially similar but is “rated as equivalent” or of “equal value”, for race and disability. This is a significant proposal with potentially wide-ranging implications. Although the consultation does not propose extending the entire equal pay regime to race and disability, this will allow claimants to make comparisons with those doing different jobs – something that is currently very difficult because direct discrimination requires a comparison with someone whose circumstances are not materially different. On the one hand this will certainly help to equalise the law, but a significant consequence of this will be to introduce the same complexity (and presumably delay/cost) relating to the assessment of equal value.

• Allowing hypothetical comparators for equal pay claims in two situations – comparison with a successor in the same role, and comparison including back pay with a new employee who is paid more for equal work.

• Allowing equal pay time limits to be extended if this is just and equitable, as is the case for all other discrimination claims. Currently there is a longer but stricter six-month time limit for equal pay claims. This proposal makes sense as the time limits for other claims are due to increase from three to six months in October.

Pay equity in contractual arrangements

The consultation proposes a new duty on employers to “take all reasonable steps to uphold pay equity in their contractual arrangements”. This is designed to tackle the issue of employers using outsourcing to avoid equal pay obligations, because there are only limited circumstances where pay comparisons can be made between different employers. This new duty would apply to all parties involved in an outsourcing arrangement, including the principal, any intermediary, and the employer that actually employs the outsourced worker. The duty would be enforced by the new Equal Pay Regulatory Enforcement Unit, by requiring each party to take steps to ensure pay equity in the future. It would not involve direct claims by employees or any compensation payments.

The taking of “all” reasonable steps is currently under close scrutiny in other areas of employment law and so it will be interesting to see how (and if) there is any specific guidance on that point.

What next?

Although these are some wide-ranging proposals, it seems many of them will not happen quickly. The consultation makes it clear that the current system needs to be improved before legal protections are broadened, and that there will be an extended implementation period. The government refers to the need to reduce the Employment Tribunal backlog and says that improving the Tribunal system is the next essential step after improving pay transparency and enforcement – so gaps in the law will be closed “only when these systems are working better”. The more cynical might wonder whether these reforms will ever happen if they are contingent on fixing the overburdened and underfunded Employment Tribunals, which are due to become even busier as the various Employment Rights Act 2025 reforms kick in.

The consultation closes on 27 October and can be viewed here. Lewis Silkin will be responding to this consultation and we are keen to hear your views.