Gender Pay Gap

Large organisations in the UK are required to report their gender pay gap data on the “snapshot” date if they have 250 or more employees. This applies across private, public and voluntary sectors. If you are an employer who is part of a larger group with multiple legal entities, each separate legal entity that meets the 250-employee threshold must report.

For most employers, the “snapshot” date will be 5 April each year, but for public authorities, it is 31 March each year. Employers need to calculate and report their:

• mean gender pay gap in hourly pay
• median gender pay gap in hourly pay
• means bonus gender pay gap
• median bonus gender pay gap
• proportion of male and female employees who received a bonus
• proportion of male and female full-pay in each quarter of pay.

In this article, we will explore the gender pay gap reporting obligations under UK law, the challenges of gender identity disclosure, and how this area could change in future.

Gender identity disclosure and legal protections

The Government Equality Office (“GEO”) advises that an employer may exclude individuals from its gender pay gap calculations where an employee does not identify as either gender.

However, this guidance does not take into account the UK Supreme Court ruling in For Women Scotland Ltd v Scottish Ministers [2025] UKSC 16. It was held in this case that the terms “man”, “woman” and “sex” under the Equality Act 2010 refer specifically to biological sex. While the Court did not address gender pay gap reporting in detail, it did acknowledge that the Equality Act gives the government the power to require private-sector employers to publish information on pay disparities between men and women.

As the Gender Pay Gap (GPG) Regulations are issued under section 78 of the Equality Act 2010, and since they do not include definitions of “male” or “female”, it is reasonable to infer that the Court’s interpretation of sex as biological would also apply here.

Following the For Women Scotland judgment, it is my view that the Government Equalities Office (GEO) will revise its guidance to align with the ruling. This would likely mean that gender pay gap reporting would be based on biological sex, not gender identity. In contrast to the current guidance, employers would probably no longer be advised to omit employees who do not identify as male or female. Instead, the implication of the ruling is that reporting should, where feasible, reflect employees’ biological sex.

In practice, an employer will need to look at what information they hold about an employee’s biological sex. For example, an individual with a Gender Recognition Certificate (GRC) might choose not to disclose their biological sex or might answer a question on sex according to their acquired gender. An employee’s gender should not be assumed if data has not been collected, and an employer that does make assumptions as to an individual’s gender could face potential claims under the Equality Act 2010.

Employers should continue to follow the current guidance until such time as further guidance is issued.

The gender pay gap regulations don’t define “man” and “woman” and it is therefore important for employers to be sensitive and open-minded in how an employee identifies their gender.

Employers should avoid singling out employees to query their gender. Instead, employers should begin by using the information the employee has already provided, a starting point is checking HR and payroll records. If these searches do not provide any results or a clear indication as to the employee’s gender, employers should look for a way to allow the employee to update their records, which includes a part for them to record or update their gender.

As already advised above, where an employee doesn’t identify as either gender, they can be excluded from gender pay gap calculations.

Employers should note that when reporting their gender pay gap, there is no legal obligation to include a “prefer not to say” option. However, this option may help individuals disclose their gender comfortably, without concern or repercussions. When preparing their report, employers may also include a narrative explaining their results, along with any actions they intend to take to address gaps.

Legal protections for transgender employees

The Equality Act 2010 offers protection for individuals who identify as transgender. The act makes it unlawful for an employer to discriminate against an employee because of their transition, including in relation to:

• Recruitment processes
• Pay and benefits
• Promotion and career progression
• Workplace harassment.

The act defines gender reassignment as a protected characteristic, ensuring that employees are not discriminated against because of a transition to a different gender. It is important that these individuals are taken into account by employers when complying with their gender pay gap reporting obligations, and in light of the For Women Scotland case, employers should try to identify an employee’s sex in a sensitive manner to ensure their reporting is accurate. The current reporting requirements state “250 or more employees” and does not discuss sex or gender, so employers need to include the total number of employees to see if they get over the 250 threshold, but omit any they do not have gender data for.

Conclusion

Following the landmark case of For Women Scotland, gender pay gap reporting is likely to shift toward biological sex reporting. As discussed, the GPG Regulations require employers with 250+ employees to report on pay differences between “men” and “women”, however, the regulations do not define “men” or “women”, so post-For Women Scotland, it’s expected that the default interpretation will follow the Supreme Court’s definition of biological sex, not gender identity. Employers may in the future need to classify employees by biological sex when compiling gender pay gap data, even if an employee holds a Gender Recognition Certificate.

It is important to note that the ruling in For Women Scotland doesn’t remove protections in place for transgender individuals under the Equality Act 2010, specifically in relation to gender reassignment. We would like to highlight that employers are still required to take proactive steps in preventing discrimination, harassment and victimisation of these individuals. Transgender individuals who are excluded from the workplace based on their biological sex may still bring and have claims if the exclusion is not justified or proportionate.

As the law and dialogue around gender identity are developing, employers need to take the initiative in addressing such changes and ensuring that, regardless of their gender, all employees are afforded fair treatment and equal opportunity.

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Please contact a member of our Employment Law team if you have any questions or need assistance with gender pay gap reporting. You can use our online enquiry form or call 0330 191 5713.