Beyond the Numbers: mandatory Gender Pay Gap and Menopause Action Plans are on the horizon…

Since 2017 all employers with more than 250 employees have been required to annually publish a set of statistics showing their gender pay gap – the difference between the average pay of men and women in their organisations. As well as publishing their pay gap statistics on a government website employers also have to include the statistics on their own public websites and leave them there for 3 years making it easy to track any changes to pay gap data.  Following the maxim that “what gets measured gets managed” the idea was that this transparency would encourage employers to take action within their organisations to address the root causes of pay differences with a view to closing the pay gap over time. 

Alongside their pay gap data, many employers choose to publish a gender pay action plan so that employees (and others who take an interest) can see what actions they are taking to address any gaps identified.

Progress on reducing the pay gap has stalled in recent years and data published by the Fawcett Society suggests the gender pay gap widened in 2024.  In a bid to  address this, from April 2027, the Employment Rights Act 2025 will make it mandatory for employers with more than 250 employees to publish action plans both in relation to the steps they are taking to address their gender pay gap as well as in relation to how they will support employees experiencing menopause. 

In preparation for the implementation of these mandatory action plans, the government has published a list of 18 actions an employer can commit to taking Action plans: list of actions - GOV.UK the idea being that employers can use this list to create those two action plans now, on a voluntary basis, before they become obligatory in 2027. In addition, more detailed guidance on how to create those action plans is to be published in April this year. 

In advance of that, the short overview Creating an action plan: guidance for employers - GOV.UK  published with the list recommends that, when choosing what actions they should take, employers should: 

1. Consider employees’ characteristics including their ethnicity, disability status and socio-economic background as actions may have different impacts on different groups
2. Engage with senior leaders to get buy-in for actions
3. Seek employee input from unions (where present), HR and relevant employee networks
4. Consider training for senior leaders and line management  

When action plans become mandatory employers will be expected to pick at least one action to address their gender pay gap and one action to support employees experiencing menopause. The suggested actions include steps an employer can take in relation to recruitment, development and promotion, building diversity into the organisation, increasing transparency as well as supporting employees experiencing menopause. The guidance promised in April will also set out how employers should analyse data to understand the issues within their organisation, choose appropriate actions, publish their action plans, track outcomes and review plans.  

In mainland Europe, the EU has decided that tougher action is required –commonly known as the Pay Transparency Directive (which member states must implement by June 2026) this EU Directive stipulates that where a pay gap of over 5%  in any worker category is identified that cannot be justified by objective, gender neutral criteria, a compulsory pay evaluation exercise is required. In addition, where an employer fails to comply with its compulsory pay gap reporting obligations as required by the Directive, the burden of proof shifts to them to prove the absence of discrimination if a claim of unequal pay is brought. It will be interesting to see if the UK adopts that as a direction of travel, if mandatory publication of action plans proves ineffective.

For now, the new focus on menopause support and the impact of other characteristics on the efficacy of the action plan means that even employers who already produce action plans will need to review the list of actions (and the guidance when published) to identify what data they will need to collect about their employees in order to choose the right actions and to be able to track outcomes so that progress against their plans can be reviewed each year. Employers who do not currently produce action plans and so do not collect the relevant data would be wise to use this year as a trial run, even if they do not publish anything until publication is mandatory – which for 2027 will be within 12 months of the snapshot date of 4^th April 2027.

When action plans become mandatory employers will be expected to pick at least one action to address their gender pay gap and one action to support employees experiencing menopause.

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