The tribunal system is facing an unprecedented rise in claims, the Equal Opportunities Commission has warned.
Sex discrimination cases more than doubled in a year
More women are willing to challenge their pay because of the "no-win, no-fee" offers from lawyers, it says.
Figures from the Tribunals Service this month showed equal pay claims increased by 155% in 2005-2006, rising to 44,013.
The commission wants a "carrot and stick" approach to be introduced to make employers ensure their pay systems are fair.
The majority of cases involve local authorities, but the commission says the private sector is just as vulnerable to claims.
It warns that "no win, no fee" lawyers will continue to fuel the number of women challenging employers.
The commission suggests a new system in which employers must agree to check their pay system for discrimination to ensure it is fair.
In return they would get breathing space - a period of two to three years when they would not have to face any individual pay claims.
The Commission's chairwoman, Jenny Watson, said: "In return for accepting a legal obligation to check their pay systems are free from discrimination and taking robust steps to put their house in order should they find they have a problem, we think employers should have some breathing space from individual claims for a limited period.
"This approach - what we're calling a 'protected period for transitional arrangements' - is the kind of modern approach that's needed."
Deputy Leader of the Labour Party and Minister for Women Harriet Harman said she was determined to improve the situation.
"Above all we've got to have fairness and equality for women at work, but we've also got to make sure that the public sector, many of whom owe a great deal in back pay, can manage their budgets, can provide fairness in the back pay, but also continue to provide good public services."
The Tribunals Service said that, despite the increase in cases, the situation is under control.
It said many of the claims involve a large number of people taking action against the same employer on the same or very similar grounds, meaning one tribunal hearing can resolve a large number of claims.
A spokeswoman said: "The influx of a large number of cases can create pressure points, but tribunal staff and judiciary have wide experience of such situations and have developed efficient and practical approaches to handling them.
"Despite a 15% increase in employment tribunal cases in 2006-07, we managed in the same year to reduce the waiting times for single cases appearing before employment tribunals."