In brief
- The Government will legislate to require employers to publish salaries in job adverts. The detailed scope is still to be set out.
- Legislation is promised 'as soon as possible', but no implementation date has been announced. Employers are encouraged to publish pay information voluntarily now.
- Publishing salaries will make differences between recruitment pay and existing staff pay more visible, potentially prompting equal pay concerns.
- Employers should consider reviewing pay ranges and differences between recruitment salaries and existing staff pay before publishing them.
What has the Government announced on salaries in job adverts?
The Prime Minister has announced plans for a 'say what you pay' law requiring employers to publish salaries in job adverts. It follows the Government's recent consultation on equal pay and pay discrimination. The Government says its early analysis shows that 94% of consultation respondents support the requirement, including 93% of business respondents.
Employers that do not currently disclose salaries will need to change their recruitment practices.
Details on scope, required information, implementation and enforcement will be set out in due course. Open questions include:
- how the stated intention to cover all employers will be reflected in the legislation, and whether there will be any exceptions;
- which roles will be affected, and whether that includes roles filled without an advert (the consultation proposed that candidates for unadvertised roles should get pay information in writing before interview);
- whether employers must publish a specific salary or can use a range and, if so, how wide that range may be; and
- whether employers will need to disclose only basic salary or also other remuneration such as bonuses.
Employers with EU operations face similar requirements under the EU Pay Transparency Directive, which also bans employers asking questions about pay history.
What could greater transparency mean for equal pay risk?
Once salaries are public, existing staff can compare them with their own pay. The Government says publishing salaries upfront can help expose unjustified differences in pay and give workers more confidence to challenge discrimination. Where recruitment salaries exceed the pay of existing staff doing equal work, employers should examine the reasons for the difference and whether it raises equal pay concerns.
The consultation also proposed reintroducing statutory questionnaires for pay discrimination claims. Under the previous regime, abolished in 2014, a tribunal could draw an adverse inference if an employer failed to respond to the questionnaire within the required period or gave an evasive or equivocal answer.
What should employers do now?
Employers need not overhaul their recruitment processes yet, although those with overseas operations may already be doing so to reflect significant advances in pay transparency requirements in the EU, parts of the USA and elsewhere. Sensible preparatory steps include:
- reviewing whether job adverts, including those placed by recruitment agencies, already include salary information;
- considering whether salary ranges are realistic and defensible, with a clear basis for deciding starting pay within them;
- checking how planned recruitment salaries compare with the pay of existing staff and whether differences can be objectively explained (such a review can potentially be structured under the cloak of legal privilege); and
- briefing HR, Reward and hiring managers to plan a consistent approach.
We will update clients when the detail and timetable are published. In the meantime, please get in touch with a member of the Employment team or your usual Mishcon contact if you would like to discuss how this announcement could affect your business.