Arts Council England (ACE) has committed to paying its staff at least the real Living Wage.
About 580 employees will be assured at least £10.75 per hour if they live in London or £9.30 in the rest of the UK.
Human Resources Director Ian Matthews said he was proud of the change: "We believe a hard day's work deserves a fair day's pay."
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According to ACE's latest Equality and Diversity report, its gender pay gap grew in 2019. Female staff used to earn on average 10p more an hour than male staff; now male employees earn an average of 62p per hour more than females.
The funder has also asked its contractors and suppliers to commit to a longer term plan to pay third-party staff like cleaners the Living Wage, although it has no ability to enforce this.
Chair Nicholas Serota told ArtsProfessional its council would discuss the possibility of making payment of a Living Wage part of National Portfolio funding agreements.
"We know people who work in the arts are too lowly paid but we can't just wave a magic wand."