Changes to GPG reporting and pay transparency in the UK
Pay transparency requirements across the EU have been gathering pace in recent months, any employer with operations in EU markets will be acutely aware of the implementation pressures now building. While EU regulations do not apply directly to the UK, the UK government has been progressing its own agenda in parallel: a number of changes to the existing gender pay gap reporting framework have been confirmed, and a further update on pay transparency in the UK has been issued.
GPG (Gender Pay Gap) Reporting changes
The UK's GPG reporting framework is undergoing its most significant overhaul since its introduction in 2017 through the Employment Rights Act 2025 and proposed Equality (Race and Disability) legislation. The aim is to accelerate progress in closing the GPG. The act contains a number of provisions, those most relevant to GPG reporting are summarised below:
Key developments include:
For the 2026/2027 reporting cycle, Equality Action Plans (EAPs) remain voluntary and may be published on the Government portal for those who choose to complete them
From 2027, EAPs will become mandatory under section 33 of the Act. Employers with 250+ employees will need to set out how they will address the GPG in their business and the EAP must include:
An evidence-based explanation of why any gap exists (drawing on data such as recruitment, progression, part-time working patterns)
Evidence of actions already taken in the previous 12 months
Measurable commitments and actions to close the gap further, with a delivery timeline and named accountability with a senior signatory
All in-scope employers will be expected to publish an EAP even if they have no pay gap, to show that they are monitoring and managing pay equality internally
EAPs will need to be published on the gender pay gap reporting service alongside the GPG statistics, and to the same timetable and deadline
Employers with 250 or more employees will also be required to publish Menopause Action Plans which may be integrated with the EAP rather than published separately
The Act also extends to the GPGs of outsourced workforces. Employers will be required to disclose the identity of their outsourcing providers and will need to share the providers' GPGs and their stated improvement actions, within their EAP narrative. Headline GPG figures will continue to be calculated on direct employees only, but the action plan narrative will need to extend further. The intent is to hold employers accountable for the pay equality of their wider workforce ecosystem, including their supply chain. The requirement is set out in the Act, with the detail to follow in secondary legislation.
The Employment Rights Act does not contain any requirement for ethnicity or disability pay gap reporting. These sit in the separate Equality (Race and Disability) Bill, which is expected to be introduced during this Parliament.
Pay Transparency in the UK
In March 2026, the Office for Equality and Opportunity (OEO) published guidance which shows that the UK is not formally aligning with the EU Pay Transparency Directive but is moving in a similar direction. The guidance paper sets out some suggested actions for employers to consider but these are not being made compulsory yet. The list of actions include:
• Include pay information in job adverts
• State if pay, leave or development is negotiable
• Make all internal promotion and transfer opportunities visible to all employees
• Share how decisions are made about which pay band a job is placed into
• List the criteria and processes used to make decisions for promotions, pay reviews and bonus awards
The OEO guidance states that this information should be shared with both employees and applicants wherever possible.
Ellason commentary
The direction of travel on pay transparency in the UK is clear, even if the precise mechanics of the UK regime remain a work in progress. Between the Employment Rights Act 2025, the forthcoming Equality (Race and Disability) Bill, and the OEO's March 2026 guidance, the government has set a clear policy intent. The bar for what employers are expected to disclose, explain, and act on is rising, and in a direction that is consistent with the path being taken by the EU.
For UK-headquartered employers without an EU footprint, the temptation will be to wait for the regulations to settle before acting. We caution against this. The underlying capabilities that support a credible transparency framework (e.g. robust job architecture, defensible pay decision-making, evidence-based narratives, and managers who can confidently explain pay outcomes) all take time to build. Employers who begin investing in these foundations now will be ready when the regulations bite, those who delay risk being forced into rushed remediation, with the cost, resource capacity and reputational risks that this can bring.
For multinational employers, the picture is more complex. The UK and EU regimes are converging in direction but diverging in detail, which creates an understandable temptation to run parallel approaches. In our experience, a single, well-designed transparency framework, calibrated to the highest applicable standard and adapted by jurisdiction only where strictly necessary, is almost always more efficient, more consistent, and more credible than operating different systems side-by-side.
Beyond compliance, the strategic prize is considerable. Pay transparency, done well, is one of the most powerful tools an employer has to build trust, support engagement, and differentiate itself in the talent market. Done poorly, or done late and in a rush, it is one of the fastest ways to erode all three.
Please do not hesitate to contact any of the Ellason team should you wish to discuss this issue in the context of your own business, or our experience in supporting clients on their journey to pay transparency.