As we mark Women’s Pay Day — the day women stop effectively working for free, which this year falls on 15 February — attention turns to new legislation aimed at closing the gender pay gap. What is it, and why does it matter for your organisation?
With new gender pay gap regulations taking effect in April for employers with more than 250 employees, organisations will need to show how they’re addressing pay disparities and supporting employees during the menopause.
It is already a legal requirement for employers with 250 or more employees to publish an annual gender pay gap report, showing the average and median pay differences between employees recorded as male or female under the current reporting framework. Under the new Employment Rights Act, they are also expected to develop equality action plans and publish them on both their own website and the government gender pay gap reporting portal.
The new legislation is far more than a box-ticking exercise. Equality action plans reflect an organisation’s values and commitment to fairness and equity. When used well, pay gap data and analysis become powerful tools that help organisations not only close the gender pay gap but also create workplaces where people feel valued, supported and able to advance their careers.
Equal pay good, gender pay parity better
Let’s address some common misconceptions. Equal pay is not the same as the gender pay gap. Equal pay ensures men and women doing the same work, or work of equal value, are paid the same. The gender pay gap, however, looks at all earnings across the organisation, which often exposes deeper structural issues, such as having fewer women in senior or highly paid roles.
Secondly, it’s not simply a matter of having a woman in a high-paid position. A woman CEO won’t affect the median gender pay gap at all. The median reflects the middle of the pay distribution, on which one highly paid woman would have no impact. However, a woman CEO can influence the mean gender pay gap, because the mean is an average and is therefore more sensitive to extreme high salaries.
The gender pay gap is a broader measure that highlights patterns in progression, opportunity and representation.
That’s why equality action plans matter. They go far beyond compliance and offer a meaningful way to tackle the root causes of gender pay gaps. And if you’re an HR lead or head of people feeling overwhelmed at the thought of more legislation and administrative burden – help is at hand and you don’t have to navigate it alone.
Global 50/50: your practical, evidence-based guide
Global 50/50, the independent think tank of which I am proud to be Chair, can guide you through the maze. Our evidence-based guidance on closing the gender pay gap not only offers practical tips and resources, but also highlights the non-profit organisations and private sector companies that are already creating fair and inclusive workplaces for the benefit of everyone. The guide is a practical companion to Closing the Gap?, the recent Global 50/50 report which found that organisations with a woman CEO were, on average, associated with smaller gender pay gaps.
At Global 50/50, we understand the gender pay gap as a window into how organisations are structured and how opportunity is distributed. Pay is an outcome of decisions about role grading, progression, performance and access to influence. These decisions shape who advances, who is visible and who holds responsibility. Inequality emerges from the systems and cultures that determine whose work is recognised and rewarded.
The gender pay gap exposes the distance between an organisation’s commitments to equality and the reality experienced by employees. As the gap becomes more visible, the most constructive response is greater openness: publishing data, sharing what works and grounding conversations in evidence.
Progress towards closing the gender pay gap is slow, with some estimates predicting the gap won’t fully close until 2044. But however glacial — provisional 2025 data from the UK Government’s Office for National Statistics (ONS) shows the average gap down from 13.1% to 12.8% — I believe that equality action plans for larger organisations do mark a significant step forward. They offer employers a clear opportunity to build fair and inclusive workplaces where people want to contribute, grow and build their careers. They help pinpoint areas for improvement, set targets and introduce policies that are fair and equitable – steps that will ultimately lead to closing pay gaps.
The employers’ guide on closing the gender pay gap will be published shortly — look out for more details at https://global5050.org/
