Pay secrecy clauses and gender pay gap reporting when software sets pay

When pay is set or benchmarked by software, staff often cannot see how their pay compares with colleagues'. In Great Britain the Equality Act 2010 gives two kinds of visibility: employees can discuss pay to find out whether it is linked to a protected characteristic, whatever their contract says, and larger employers must publish gender pay gap figures every year. This page explains both.

The short answer: a term of a person's work that tries to stop them disclosing, or asking a colleague about, the terms of their work is unenforceable so far as the disclosure is a "relevant pay disclosure", made to find out whether pay is connected with a protected characteristic, and victimising someone for it is unlawful (s77). Employers with 250 or more employees on 5 April each year must publish six gender pay gap measures within 12 months (reg 1, reg 2).

Discussing pay despite a confidentiality clause

Under section 77:

• a term that purports to prevent or restrict a person from disclosing, or seeking to disclose, information about the terms of their work is unenforceable against them so far as they make or seek to make a relevant pay disclosure;
• a term that purports to stop them seeking information from a colleague, or former colleague, about the colleague's terms is unenforceable so far as they seek a relevant pay disclosure;
• a disclosure is a relevant pay disclosure if made to enable the person making it, or the person receiving it, to find out whether or to what extent there is, in relation to the work, a connection between pay and having (or not having) a particular protected characteristic.

Seeking such a disclosure, making or seeking to make one, and receiving the information are treated as protected acts for victimisation (s77(4) and (5)). Victimisation is subjecting someone to a detriment because they did a protected act (s27).

The protection is tied to that purpose. A general wish to compare pay is not covered by section 77 unless it is aimed at finding out whether pay is linked to a protected characteristic such as sex, race or disability.

Where software is involved

A pay recommendation tool or an AI benchmarking system can produce differences that no one in the business intended. Section 77 gives employees a way to compare notes with colleagues to test whether those differences track a protected characteristic, and confidentiality terms of their work cannot block that so far as the section applies. Monitoring or flagging staff for these conversations could amount to a detriment.

Gender pay gap reporting

Section 78 lets regulations require employers to publish information showing whether there are differences in the pay of male and female employees. It does not apply to employers with fewer than 250 employees (s78). Under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, a relevant employer is one with 250 or more employees on the snapshot date, 5 April, other than public bodies listed in Schedule 19 to the Act and other government departments and parts of the armed forces (reg 1).

A relevant employer must publish, each year (reg 2(1)):

• the difference between the mean hourly pay of male and female full-pay relevant employees;
• the difference between the median hourly pay;
• the difference between the mean bonus pay;
• the difference between the median bonus pay;
• the proportions of male and female employees paid a bonus; and
• the proportions of male and female full-pay relevant employees in each of four quartile pay bands.

The figures must be published within 12 months of the snapshot date (reg 2(2)), with a written statement confirming they are accurate, signed by the person the Regulations specify, such as a director (or equivalent) for a company (reg 14). They must go on the employer's own website, accessible to employees and the public, for at least three years, and on the website the Secretary of State designates, with the name and job title of the signatory (reg 15). An employer need not include people employed under a contract personally to do work where it does not have the data and it is not reasonably practicable to obtain it (reg 2(3)).

The Employment Rights Act 2025 adds a power for these regulations to require employers to publish who supplies their contract workers (ERA 2025 s34). Check whether that power is in force and whether regulations have been made under it.

Practical steps

• Employers: review confidentiality terms in contracts and policies so they do not claim to stop disclosures section 77 protects, and brief managers not to discourage them.
• Test pay recommendation tools for gaps by sex and other protected characteristics before relying on them, and make sure the payroll data feeding gender pay gap figures uses the correct definitions of ordinary pay, bonus and full-pay employees.
• Employees: you can ask colleagues about their pay, and share your own, to find out whether there is a link with a protected characteristic. Keep a note of why you asked. Larger employers' gender pay gap figures are published on their websites.

For the right to equal pay for equal work, see equal pay and AI pay tools. For discrimination claims generally, see AI decisions and the Equality Act; for the EU rules, see AI pay tools and pay transparency. This page covers Great Britain and is general information on the law as at 2 November 2026, not legal advice.