Firms that check and publish any difference in pay between male and female staff will receive limited immunity from investigation, the equalities commission announced today.
The "unprecedented" step aimed to encourage businesses to take voluntary measures to tackle the country's gender pay gap, said the Equality and Human Rights Commission, although the CBI said it did not support the move.
The commission said women were still paid 20 per cent less per hour than men, with a wider gap of 25 per cent in private firms, 40 years after the Equal Pay Act came into force.
A study by the commission showed that half of workers believed tackling pay discrimination was a top priority, but fewer than one in 10 firms widely published pay gap information.
Firms with more than 250 employees which publish details were unlikely to receive formal requests for further information over the next two years, it was announced.
Commission chairman Trevor Phillips said: "I'm pleased that the Commission has been able to play such a unique role in coming up with some innovative and concrete solutions to begin tackling the issue of the gender pay gap.
"Our research shows that the majority of businesses in the UK realise that they need to address the significant differences between men and women's pay that still exist 40 years after the Equal Pay Act.
"Transparency is really the first step to addressing the gender pay gap. If an employer doesn't look at their own gender pay gap, how do they address it? By understanding that they have a gender pay gap problem they can start to take steps to address it, and, of course, it must make good business sense to be rewarding talented staff on merit and results rather than gender.
"Those that take up these measures will receive some immunity from our investigative powers. I hope this incentive combined with the goodwill and commitment shown by our partners so far means that we can deliver high levels of participation on a purely voluntary basis, ensuring that gender pay transparency will become normal business practice."
Katja Hall, the CBI's director of employment policy, said the business group could not support the proposals, adding: "There is no disagreement about the need to address the lack of women in higher-paid jobs, but there is a disagreement about what will actually work, and what will backfire.
"The publication of average salary figures for men and women, which could be made compulsory under the terms of the Equalities Bill, could be misleading. People could think that women are paid less than men in the same role, which is rightly illegal, when differences will actually reflect the proportions of men and women in higher-paid jobs.
"We need policies that will encourage talented women to aim for and apply for better-paid roles. Making companies that are struggling to attract suitable female applicants for senior roles publish average gender-pay figures could make it even more difficult."
The CBI put forward an alternative which it said would have enabled companies to report on progress towards gender equality in a meaningful way, saying: "Unfortunately the EHRC has missed a critical opportunity to propose a workable, effective policy, and the CBI has had to reject its report. "Reuse content