The Equality and Human Rights Commission (EHRC) has set out its proposals for closing the pay gap between men and women.
The recommendations include encouraging employers to review gender pay gaps and publish the results on a voluntary basis.
Those that do so will receive limited immunity from investigation, the EHRC said in its paper.
The proposals are the result of a lengthy consultation process involving the CBI, the TUC and other business groups such as the British Chambers of Commerce and the EEF.
The Commission said that forty years on from the Equal Pay Act women are still paid on average 20.2 per cent less than men when both full-time and part-time earnings are taken into account.
Over half of all employers (57 per cent) are at present reviewing pay gaps or have plans to do so, the Commission’s figures revealed.
However, barely one in ten employers currently report pay imbalances to members of staff outside human resource departments.
The Commission argued that increasing transparency is key to reducing unfairness in rates of pay between men and women.
Transparent reporting, the EHRC continued, would bring other benefits besides fairer pay structures. These include better quality decisions about rewards and remuneration, and greater employee confidence in the reward process.
But it would not mean that individual employees will have the automatic right to know what others earn nor that employers would have to publish details of individual employees’ salaries.
Specifically, the Commission has put together a list of voluntary assessments on gender pay from which employers with more than 250 staff can choose.
They can focus on the single figure difference between the median hourly earnings of men and women; the difference between the average basic pay and total average earnings of men and women by grade and job type; or the difference between men’s and women’s average starting salaries.
To encourage more transparent reporting on gender pay, the Commission recommended that employers that adopt the measures should have a limited degree of immunity from investigation. The immunity, however, will not extend to anti-discrimination cases.
The Commission intends to produce guidance on the proposals in April this year.
It will begin monitoring the take up of the proposals by large companies later in 2010, with scrutiny extended to firms employing between 250 and 500 employees set for next year.
Trevor Phillips, chair of the EHRC, said: “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? And, of course, it must make good business sense to be rewarding talented staff on merit and results rather than gender.”
Mr Phillips added: “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.”