Employment Rights Act: navigating the new era of pay gap reporting
12th February 2026
Samantha Gee
The Employment Rights Act 2025 marks one of the most significant shifts in UK employment law in recent years. While much of the attention has focused on unfair dismissal and broader employee rights, a quieter but equally important change is emerging around pay gap reporting, pay transparency and workplace equality.
From 2026 onwards, large employers will start to see gender pay gap reporting move from a compliance exercise to something far more action-focused and accountable.
From gender pay gap reporting to equality action plans
Currently, the Equality Act requires employers with 250 or more employees to publish annual gender pay gap data, showing differences in average pay and bonuses between men and women.
There is no requirement to provide any contextual narrative, but many employers do so voluntarily. Some of these will also outline plans to address the gap.
The changes coming into force under the Employment Rights Act build on this by introducing a new requirement: employers will need to develop and publish equality action plans alongside their gender pay gap reports.
These equality action plans will need to focus on two areas:
- Reducing the gender pay gap – explaining what’s driving pay disparities and setting out practical steps to address them
- Supporting employees through menopause – recognising menopause as a workplace issue that can affect retention, progression and long-term pay outcomes and identifying actions to address this
The direction of travel is clear and publishing figures alone will no longer be enough.
Key dates
- From April 2026 – employers with 250+ employees can voluntarily publish gender pay gap and menopause action plans
- From 2027 – equality action plans become mandatory, with detailed requirements set out in secondary legislation
Wider pay gap reporting
Alongside these changes to gender pay gap reporting, the government has also committed to introducing mandatory ethnicity and disability pay gap reporting for large employers, subject to consultation and legislation.
While not yet in force, this signals a clear move towards more holistic and intersectional pay gap analysis.
Many organisations are already preparing by improving workforce data collection, building employee trust around sensitive data and voluntarily conducting ethnicity and disability pay gap reporting. Early preparation reduces risk and supports smoother compliance.
Keep a look out for Blog 2 in this series where we will explore what makes a great voluntary narrative, including a strong equality action plan.
How we can help
At Verditer, we are specialists in reward including pay transparency and gap reporting. Contact us if you’re looking for external expertise to support with your gender pay gap or equality action plan.
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