Rebecca Hilsenrath, chief executive of the commission, said: “Over 40 years since the ban on sex discrimination in pay, it is shameful that women continue to be held back. But change is on the horizon and it’s about time.

“The law now says employers must be transparent about pay for women, and our regulatory role is to make sure this happens.

“We will educate employers about their responsibilities and hope to see widespread compliance.

“If that doesn’t happen, we won’t hesitate to resort to our more stringent legal powers – including enforcing unlimited fines and convictions.”

The commission has opened a consultation between now and 2 February explaining how it will use its powers. It said:

• It may investigate suspected breaches of the regulations by private and voluntary sector employers and offer them the opportunity to enter into a formal agreement to comply as an alternative to continuing with the investigation. Such agreements can themselves be enforced if not complied with.
• It may issue unlawful act notices against employers who do not accept the offer of an agreement and who are found to have breached the regulations as a result of the investigation. These unlawful act notices will require employers to comply with an action plan which can be enforced through court orders.
• It may seek summary convictions and an unlimited fine to those who still refuse to comply with a court order.

The current UK gender pay gap is calculated at 18.4%, but the commission said that company “action plans” to tackle pay gaps will be “key”.