From 2027, employers with 250 or more employees will not only have to report their gender pay gap, but also the active steps they are taking to reduce it through the publication of mandatory equality action plans. Employers have a limited window to assess their approach, identify gaps and consider what measures are likely to be effective before compliance becomes mandatory. The requirement for annual review is likely to mean increased scrutiny from regulators, employees and the public where employers fail to demonstrate meaningful progress.
Purpose and scope
The government is introducing a requirement to produce equality action plans as part of a wider push to reduce the gender pay gap, alongside improving support for employees experiencing menopause.
These plans will require employers to set out transparently which actions, from a government-published list, they are taking to achieve those aims. The government is encouraging voluntary publication for the 2026/27 reporting year, with the first mandatory plans due by 4 April 2028 for the 2027/28 reporting year.
New guidance
Building on the initial guidance published in March, the government has released a detailed six-step plan on complying with the equality action plan obligations.
- Understand the issues: Employers should investigate their gender pay gap and menopause support, via both data analysis and employee consultation.
- Choose actions: Having identified the cause of the issues, employers can make an informed decision as to which actions they should select from the government list. At least two of the chosen actions must be new practice to the company.
- Description: Employers must accompany each action with a short explanation (limited to 100 words) of why they have selected that option. They must support the overall plan with a 200-word summary.
- Submit the plan: Employers must sign up to the gender pay gap reporting service and choose a designated individual to sign off on the plan before submission. This is not necessary for most public authorities.
- Track outcomes: The government expects employers to make their plan consistent with relevant metrics to ensure it is working and adapt it if necessary.
- Review the plan: Once mandatory, employers must review their plan annually.
Example actions
The guidance includes 18 example actions across areas including recruiting staff, developing and promoting staff, building diversity into your organisation, increasing transparency and supporting employees experiencing the menopause. The full list is available here.
One suggested action aimed at reducing the gender pay gap is automatically considering eligible employees for promotion opportunities. The guidance suggests this may be particularly useful if you have low levels of female progression into senior roles or poor retention of female employees. The guidance suggests doing this by allowing employees to opt out of promotion processes, rather than requiring them to put themselves forward.
To improve menopause support, you could conduct a menopause risk assessment for your workplace, to ensure the workplace and ways of working do not exacerbate menopausal symptoms. This assessment should consider factors such as the temperature and ventilation of the workplace and whether you train managers on health and safety issues for menopause. Carrying out such an assessment will also make your business better placed to identify further appropriate actions.
Implications and challenges for employers
To comply, employers will need strong data analytics capability to understand both the level and underlying cause of their gender pay gap. Structures for consulting employees on both their gender pay gap and menopause support will also be valuable to ensure your plan targets the right issues and is likely to secure employees’ support.
The guidance requires employers to choose at least two new actions. As a result, employers will not be able to rely on simply tailoring pre-existing structures that deal with their gender pay gap or menopause support. The list of 18 example actions published by the government may provide inspiration for new actions to supplement any you are already taking. Whilst the guidance requires two new actions, there is no maximum limit, so you may wish to include pre-existing actions to demonstrate your commitment to improving gender equality in your workplace.
What employers should do now
Equality action plans are likely to shift gender pay gap reporting away from a largely data-driven exercise towards a more visible and qualitative assessment of what employers are doing to improve outcomes. Employers should therefore consider starting preparatory work now, including reviewing data capabilities, consulting employees and assessing whether existing initiatives can demonstrate measurable impact once annual review obligations take effect.
