Government plans to require salary information in job adverts

The Government has announced plans to legally require employers to publish salary information in job adverts as part of a new “say what you pay” requirement.

Currently, less than half (41%) of employers always publish salary ranges in job adverts, while only 18% always publish specific salaries. The proposed change could therefore have significant implications for employers and their recruitment practices.

What has the Government announced?

Under the proposals, publishing salary information in job adverts will become a legal requirement, with the Government keen to ensure greater openness around pay for all employers.

The plans are intended to ensure jobseekers know what a role pays before investing time in the application process, while also helping to address pay inequalities that can disadvantage women.

Commenting on the announcement, Prime Minister Andy Burnham said:

“Whether you’re a young person starting out or a parent trying to support your family, you should know what a job pays before spending your time and effort applying for it. That’s why we will make it a legal requirement for all employers to say what you pay.”

There appears to be considerable support for greater pay transparency. Analysis of the Government consultation shows that 94% of respondents supported the requirement, including 93% of businesses.

The Government has said it intends to bring forward legislation as soon as possible. In the meantime, businesses are being encouraged to publish salary information in job adverts voluntarily rather than waiting for the law to change.

What does this mean for employers?

As with any new announcement, employers will need to wait for further detail on the scope of the proposed change and exactly how the new requirements will operate.

There are several important questions still to be answered, including:

• Will there be any exemptions?
• Will employers need to publish basic salary only, or also benefits and other terms?
• Can salary expectations be expressed as a band or will a specific figure be required?
• When will the law change?
• What consequences will employers face if they fail to comply?

Employers may also be considering the wider implications of greater pay transparency. For example, whether restrictions can still be placed on employees discussing pay, whether existing employees may question their own remuneration and whether increased transparency could contribute to grievances or equal pay claims.

In our view, greater pay transparency is likely to bring some of these issues to the surface. However, employers that can demonstrate fair and equal approaches to pay should be better placed to respond.

Where there are unjustified differences in pay, employers may wish to use the period before the legislation takes effect to audit their current pay arrangements and identify potential areas of risk.

This may be particularly important for organisations that have grown through mergers or have been involved in TUPE transfers, where different historic pay structures can create additional complexity when seeking to justify pay disparities.

What should employers do now?

1. Reviewing how salaries are currently advertised

Consider whether job adverts currently include salary information and, where they do, whether this is expressed as a band, scale or specific figure. Where salaries are not disclosed, consider how this could be introduced.

2. Looking at competitors and the wider sector

Review how comparable employers currently approach salary transparency and whether your organisation’s practices are consistent with the wider market.

3. Assessing whether salaries remain competitive

This is an opportunity to consider pay levels across the organisation, how they compare with the relevant sector and what addressing any identified issues could cost.

4. Reviewing existing pay discrepancies

Consider differences in pay between existing employees and whether those differences can be objectively justified.

5. Preparing recruitment teams

Ensure those responsible for recruitment and hiring understand the proposed changes and are involved in preparing the organisation’s new approach.

Although the detail of the legislation is still to come, the direction of travel is clear. Employers should consider how greater salary transparency could affect both future recruitment and existing pay structures, rather than waiting until a new legal requirement takes effect.