Gender pay gap action plans open to employers in 2026

The Employment Rights Act 2025 has recently received Royal Assent, and contains some important changes to how gender pay gap reporting must be carried out from 2027 onwards.

From 2027, employers with 250 or more employees will be required to publish equality action plans - effectively a compulsory narrative explaining their gender pay gap and the actions they will take to close it.

Since gender pay gap reporting was launched, publishing a narrative alongside the figures has been optional. The new requirement is intended to shift employers from simply reporting their data to taking meaningful, evidence-based action.

While there is no legal obligation to reduce gaps, organisations must show they understand the drivers of their gap and are implementing initiatives that are likely to make a measurable difference.

What needs to be included

Action plans must be updated annually and include:

Explanation of the causes of any pay gaps, based on organisational data
Actions already taken, such as manger training or reviewing processes and procedures that may directly or indirectly disadvantage women
Specific, measurable commitments to close gaps further, including how progress will be tracked and reported

Beyond these core elements, action plans should demonstrate that employers have taken the time to understand the underlying drivers of their gender pay gap.

The government’s emphasis on evidence-based analysis means employers will be expected to move beyond generic statements and provide a clear, data-driven explanation of what is happening in their workforce.

Equally important is the quality of the actions being proposed. The legislation does not prescribe specific interventions, but it does expect employers to focus on initiatives with a proven track record.

Finally, measurable commitments are central to the credibility of an action plan. Employers should set out not only what they intend to do, but how progress will be monitored, who will be accountable, and when updates will be provided.

This level of clarity helps build trust with employees and stakeholders and ensures the action plan becomes a living document rather than a one-off exercise.

Even employers reporting no pay gap must still publish an action plan, focusing on how they will maintain this position.

Currently only around half of employers publishing their gender pay gap reports include a narrative accompanying their figures. Making action plans mandatory represents a shift in focus from reporting the gap to demonstrating how it will be reduced.

The Employment Rights Act also requires employers to publish menopause action plans on an annual basis, which can be incorporated into the gender pay gap action plan.

Extending accountability to outsourced workers

A further new requirement is for employers to include the pay gaps of any outsourcing providers within the action plan narrative. This reinforces the expectation that employers take responsibility for the gender equality of their wider workforce.

It remains the case that only directly employed staff should be included in the published figures.

Including the pay gaps of outsourcing providers is one of the most significant shifts introduced by the Act. The intention is to prevent organisations from inadvertently masking gender inequality by outsourcing lower paid or female-dominated roles.

When should employers start publishing action plans?

The government is expected to encourage voluntary publication in 2026, ahead of mandatory requirements in 2027. Some employers may choose to publish early to demonstrate leadership. Others may use 2026 to analyse their data, identify the most effective actions, and begin implementing changes.

How employers can get prepared

Whether publishing action plans in 2026 or 2027, employers can begin preparing by:

Reviewing the government gender equality hub for evidence-based advice on initiatives that can help to close gender pay gaps. With the emphasis moving towards outcomes and action, it is more important than ever to ensure time and resources are spent on activities that will truly add value.
Gathering the data needed to support analysis on the cause of any gender pay gaps. If you already produce an annual report, you will have much of this, but it may be helpful to review the data by job level, business area or length of service to get the clearest insights.
Ensuring procurement processes take into consideration the gender pay gap of potential outsourcing partners.
Engaging other parts of the organisation to get buy in on how you will create your action plans. Clarify who will be accountable for implementing initiatives and reviewing their impact.

The decision to publish voluntarily in 2026 will depend on each organisation’s readiness, but early preparation will help ensure action plans are meaningful, credible and aligned with the new requirements.