UK: Gender Pay: Pay Transparency
Authors: Ruth Bonino, Corinna Harris, Chris Holme, and Sophie Jackson
To mark International Women’s Day in 2022, the government launched a pay transparency pilot which sought to improve pay transparency in the job application process and help businesses in attracting women to their positions.
Participating employers of the scheme, which was intended to put women in a position where they could negotiate pay on a fairer basis, were required to:
- include information about salary details in their job advertisements, and
- not to ask candidates to disclose salary history during the recruitment process.
However, few details about the pilot scheme have been made available and, in May 2024, it was confirmed that it has been paused. The government has said that it wants to learn from the experiences of other countries that are exploring legislative options before taking any further action.
Key Action Points for Human Resources and In-House Counsel
Despite this pilot scheme being paused, there are expectations for greater pay transparency in the UK.
The EU Pay Transparency Directive, which EU Member States must implement into their own law by 7 June 2026, introduces new obligations on employers to disclose salaries at the point of recruitment, comply with employee requests for pay data, publish gender pay gap statistics and face compulsory audits and penalties where unjustified discrepancies come to light.
The Directive establishes a new benchmark for pay transparency and whilst it will only directly apply to EU Member States, and non-EU employers who employ people in the EU, it will undoubtedly raise expectations of pay transparency in the UK. The war for talent and employee expectations will inevitably be impacted as will the expectations of shareholders and clients, who are choosing to work for and do business with companies according to their Environmental Social and Governance (ESG) strategy, which increasingly will include higher expectations on pay transparency.
For further details about the EU Directive and its likely impact on UK employers, see our update.
