Mind the (pay) gap – why equal pay is a need, not a choice

Since 2025, the UK gender pay gap has decreased by just 0.05%. Not much progress. Equal pay day offers the perfect opportunity for employers to reflect on why the gender pay gap exists and what they should do about it.

What are employers’ legal obligations?

If you have over 250 employees, you’ll need to publish your gender pay gap figures every year. Non-compliance with reporting can come with financial and reputational penalties. You also have to comply with laws around equal pay and discrimination.

Equal pay means that all employees should be treated fairly and equally, including employees, workers, apprentices, and some self-employed people. An employer may have a gender pay gap while still complying with equal pay laws. But if they don’t comply with equal pay laws, they could face legal action for discrimination.

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Why should employers close the pay gap?

If you don’t treat your employees equally, you’re at risk of legal action. In the UK, you are legally required to pay men and women equally for ‘like work’ (i.e. involving similar tasks, knowledge and skills) or ‘work of equal value’ (i.e. equivalent in effort, skill and decision making). If you don’t, you run the risk of an equal pay claim or employment tribunal. And it’s not just about pay, but equal terms and conditions like annual leave, performance bonuses, and benefits.

How can employers close the pay gap?

Check out BrightBase for policy templates that you can personalise for your business.

Consider your job descriptions, adverts and job titles. Talking of adverts, make sure your hiring staff and managers are trained and up to date on discrimination. Check pay scales and grades, and use a salary calculator tool to keep your pay equal and at market rate.

The Employment Rights Act 2025 introduces legislation that will affect all employers in the UK. Changes include unfair dismissal rights from day one, with extra rights and protections for pregnant workers and those on maternity leave, as well as mandatory gender pay gap plans and menopause action plans.

The government is developing legislation to introduce compulsory disability and ethnicity pay gap reporting. Although this is still being reviewed, it’s worth considering how you collect and store diversity data securely.

The benefits of embracing equal pay…

Paying staff equally will keep you on the right side of the law. It’ll also improve your reputation, hiring and retention, your teams’ motivation and productivity, social responsibility, and staff culture.

…and the risks of ignoring it

You can’t afford to get equal pay wrong. Not complying with the law means you risk legal action from employees with potential tribunal claims for equal pay or sex discrimination. Discrimination penalties have no upper limit, meaning an unlimited fine.

What action should business owners take?

There’s no doubt that women deserve equal pay. You should look at policies, reporting, training and payroll to make sure you're in line with the law.

For women, it’s no longer enough for employers to just understand maternity leave or equal pay. They need to consider pregnancy, miscarriage, infertility and menopause, amongst other potential areas for sex discrimination.

Equal pay day is about equal value. Not just for one day, and certainly not just for the 20% of the year that women around the world are working for free.

How BrightHR can help

Download a free diversity and equality policy that you can personalise for your business

BrightHR clients can access our 24/7 legal and employment advice, policy templates and e-learning library to make sure you are legally compliant. Our software saves you time and money on people management, simplifying your HR processes with absence management tools, time tracking and unlimited document storage, all in one place.

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