17 April, 2026

Pay transparency is moving up the policy agenda as a way to tackle workplace inequality. The thinking is straightforward: if pay gaps are visible and publicly disclosed, they tend to attract attention and, ideally, lead to action.

The UK is not new to this type of transparency and is now starting to broaden it further. Since 2017, companies with more than 250 employees have been required to publish their gender pay gap, bringing disparities into the open. And the transparency does seem to have had the desired effect, with most industries showing at least a modest improvement in their figures compared to the 2017-18 baselines. Building on this, the government has committed to introducing mandatory ethnicity and disability pay gap reporting for large employers, following a strongly supported consultation. And from January 2027 employers will also need to set out how they intend to close identified gaps alongside their gender pay gap data.

This aligns to European trends, where efforts to crack down on pay disparities are also extending beyond gender to a wider set of inequalities. The focus in both regions is also moving from identifying gaps to understanding what sits behind them and how they can be addressed.

Under the EU Pay Transparency Directive, to be implemented by June 2026, companies will need to be more transparent on pay, disclose salary ranges in hiring, and give employees the right to request pay information. Employers will also be required to report on gender pay gaps and act where these exceed 5%. With the EU gender pay gap still at around 11% – down from 16% a decade ago, before pay gap transparency – and the pension gap closer to 25%, the push is towards turning transparency into enforcement.

In practice, this means strengthening internal data on pay and workforce composition and being clear on how pay gaps are calculated and explained. In the UK, this already includes reporting on mean and median pay gaps, bonus gaps, bonus participation, and pay distribution across quartiles. The expansion into ethnicity and disability reporting is expected to follow a similar structure, while relying on voluntary disclosure of sensitive data. While the exact timeline for these requirements has not yet been confirmed, improving data quality and closing any gaps now will leave companies better prepared when the time comes.

By Mariana Garcia