On 17 May 2024, the Minister for Women and Equalities confirmed that work on the pay transparency pilot scheme had been paused, explaining that, as pay transparency is an emerging area, it is unknown whether it may have unintended negative impacts. Further, given the many competing demands for resources across the equalities portfolio, it was explained that the pausing of this scheme will allow efforts to be focused on other areas of work.
The pay transparency pilot was originally announced on 8 March 2022 with the aim of improving pay transparency and tackling pay inequality. Under this pilot, participating employers were required to include information about salary in job adverts and were not permitted to ask candidates to disclose their salary history during the recruitment process. It was hoped that, through these changes, existing pay discrepancies between men and women would be less likely to become entrenched as pay negotiations would not be based on an individual’s salary history.
The pilot scheme aligned with research by the Fawcett Society which found that 58% of women felt they had received a lower salary offer than they would have if they had not been asked about their pay history during the recruitment process. Further, this research found that 61% of women felt their confidence had been affected when asked about previous salary. These statistics support calls for pay transparency, indicating a widespread concern that past pay discrimination can follow women (and other groups) if they declare their current pay.
The government says that the pause will enable them to learn from the experience of other countries currently exploring legislative options before taking any further action. Many of these legislative actions stem from the Pay Transparency Directive which came into force in the EU in June 2023. Under the Directive, employers in EU member states with at least 100 employees are required to publish information on the pay gap between female and male workers, conduct an analysis where this gap is above 5%, and develop and implement an action plan to address this.
Following confirmation that the scheme will be paused, the Women and Equalities Committee has urged the government to reconsider.
