On 4 March 2026, timed to coincide with International Women's Day the government published guidance that could fundamentally change how employers think about pay. From April 2026, employers with 250 or more employees will have the option to produce and publish a voluntary action plan alongside their gender pay gap data, with these plans becoming mandatory from spring 2027, subject to secondary legislation. 

The purpose of action plans is to support employers in taking effective action to improve workplace gender equality, showing the steps being taken to reduce an organisation's gender pay gap and to support employees experiencing menopause.  On the face of it, this looks like a sensible, if long overdue, extension of the gender pay gap reporting regime that has been in place since 2017. But look more closely at what the government is recommending employers include in their action plans, and a more significant shift becomes apparent.

An Indirect Route to Pay Transparency?

Included within the list of recommended, evidence-informed actions that employers are encouraged to adopt is one category that should be on everyone’s radar: Increasing Transparency. Under that heading, the government recommends that employers "increase transparency for pay, promotion and rewards" and "enhance and promote flexible working and leave policies." 

This is pay transparency introduced not through primary legislation or a dedicated statutory instrument, but as one of a menu of recommended 'good practice' steps that employers are being steered towards adopting. And from spring 2027, once action plans become mandatory, there will be pressure on employers to adopt these recommendations.

Employers must choose at least one action to address their gender pay gap but the government makes clear it expects ambition: “We want organisations to go beyond choosing two actions one each on the gender pay gap and menopause and select more where possible”.  With reputational scrutiny attached to these publicly-published plans, employers may face significant pressure to adopt the pay transparency recommendation.

What Should The Action Plans Cover?

The government's recommended, evidence-informed actions are grouped into the following categories: 

Recruiting Staff

• Make job descriptions inclusive
• Encourage applications from a range of candidates
• Reduce unconscious bias in CV screening
• Use fair and structured interview techniques
• Advertise leave policies in job adverts
• Advertise flexible working arrangements in job adverts 

Developing and Promoting Staff

• Automatically consider eligible employees for promotion
• Encourage employee development through actionable steps
• Offer mentoring, sponsorship and other development programmes 

Building Diversity into Your Organisation

• Set targets to improve gender representation 

Increasing Transparency

• Increase transparency for pay, promotion and rewards
• Enhance and promote flexible working and leave policies 

Supporting Women with Health Conditions and Menopause

• Train managers to support employees experiencing menopause
• Offer occupational health advice for employees experiencing menopause
• Set up menopause support groups and networks
• Offer workplace adjustments for employees experiencing menopause
• Conduct a menopause risk assessment for your workplace
• Review policies and procedures to meet the needs of employees experiencing menopause 

The Pay Transparency Recommended Action in Focus

The inclusion of "increase transparency for pay, promotion and rewards" as a government-recommended action is significant. It sits within the "Increasing Transparency" category alongside a recommendation to enhance and promote flexible working and leave policies both of which are designed to address the structural factors that drive gender pay gaps.

The recommended actions were developed using expert insight and research, including research into how to improve gender equality in the workplace by the Behavioural Insights Team and a literature review on menopause in the workplace by the Department for Work and Pensions. That academic and behavioural-science underpinning lends significant weight to the pay transparency recommendation: it is not merely a political aspiration., but a measure grounded in the evidence based on what actually moves the dial on gender pay gaps.

In particular, the Pay Transparency section recommends that employers:

• Identify which processes to clarify: look at how you decide pay levels, promotions, salary reviews and bonuses. This may include looking at how jobs are classified.
• Talk to your employees to understand their experiences. Involves trade unions and their representatives in this process.
• Improve your policies:
• include pay information in job adverts
• state if pay, leave or development is negotiable
• make all internal promotion and transfer opportunities visible to everyone
• share how you make decisions about which pay band a job is in
• list the criteria and processes you use to make decisions for promotions, salary reviews and bonuses. You should aim to provide as much of this information as possible to applicants as well as employees.
• Remind employees about the rules
• Hold managers accountable
• Track progress using the following metrics by sex - including the combination of sex and other characteristics (such as ethnicity or disability status) to highlight specific trends for different groups of men and women:
  • the breakdown of those applying for a promotion, and successful candidates
  • the breakdown of employees in senior roles
  • the retention rate
  • The government also recommends that employers might also want to measure:
    • internal reward and performance data to see if men and women doing similar work get similar rewards
    • feedback from employees on their understanding of processes and policies to increase their pay or get a promotion, and how decisions are made
    • feedback from employees on whether they think pay and reward decisions are fair.

The timing is notable. The EU Pay Transparency Directive which requires member states to implement salary disclosure requirements from 7 June 2026 does not apply to the UK post-Brexit. Yet the government's action plan guidance appears to achieve a similar effect indirectly: by making pay transparency a recommended step within a framework that is voluntary now but mandatory from 2027.

What This Means for Employers

Employers should not wait until 2027 to consider their position. Action plans will be published on the government’s gender pay gap website and will be available to the public alongside gender pay gap data. That means employees, unions, investors, and the press will all be able to see not just what an employer has committed to, but what it has chosen not to commit to.

Penny East, Chief Executive at the Fawcett Society, has made clear that over the next year, while plans remain voluntary, her organisation will continue to work with the government to ensure the final compulsory framework includes stronger pay transparency measures and clear accountability. Employers who fail to get ahead of this now may find the mandatory framework, when it arrives, is considerably more demanding than today's guidance suggests.

The message is clear: the government may not have called this pay transparency legislation, but that is increasingly what it looks like.

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Your contacts

At Deloitte, we understand that navigating the demands and complexities of pay equity and transparency can be daunting. Our proposition is designed to help you overcome this challenge and achieve your goals. Our aim is to enable you to pay employees equitably and help you demonstrate that you are doing so.

With our deep multi-disciplinary expertise in reward, employment law, technology & analytics, and behaviour change, we are well-placed to be your trusted partner on this journey. Get in touch to discuss your challenges and needs.

Kathryn Dooks, Partner, Deloitte Legal, 020 7303 2894

Deepinder Lamba, Partner, Deloitte Global Employer Services, 020 7007 2689

* The information provided is for general informational purposes only and may not be complete or up-to-date. Do not rely on this information without seeking professional advice. Deloitte LLP accepts no liability for any loss occasioned by any person acting or refraining from action as a result of this content.