The current grey area of salary transparency could be about to become a lot more regulated. As an employer, understanding the proposed reforms to the current equal pay and discrimination framework in the UK will be vital in navigating future hiring and payroll processing with full compliance.
On 14 July 2026, the government launched a major consultation on reforming the UK’s equal pay and pay discrimination framework. Among the proposals attracting particular attention is a new requirement for employers to provide pay information when recruiting.
If the proposals become law, employers will likely need to include salary information in job adverts, or, where a role is not advertised, provide it to candidates in writing before an interview.
For businesses used to keeping salary discussions until later in the recruitment process, this could represent a significant shift.
For payroll and HR teams, reform will also mean that the quality and consistency of pay data becomes even more important at the point a new role is created.
So, what exactly is being proposed, and what could it mean for employers?
What is the Government Proposing, and Why?
The government, echoing general discourse around the current framework, has noted the existing system to be complex, costly and slow, with too much reliance on individual employees bringing claims after potential discrimination has occurred.
As such, the proposed reforms are intended to put greater emphasis on prevention and transparency, rather than waiting for disputes to arise.
One of the clearest proposals is a statutory requirement for employers to publish pay information in job adverts. Where there is no job advert, the employer would instead have to provide the candidate with the relevant pay information in writing before the job interview.
The government has not yet decided exactly what employers would have to disclose. The consultation asks whether this should include a salary, a salary range or a benchmark rate, and whether other financial benefits or pay conditions should also be covered. It also suggests that regulations could determine matters such as the permitted size of a salary range.
That means employers should not assume that simply adding a broad salary band to every vacancy is necessarily what the final rules will require.
Why Could This Change Recruitment?
For many employers, the biggest impact may not be the job advert itself. It is what happens before the advert is written.
Currently, many businesses will provide a salary range to candidates, which allows for employer flexibility further down the hiring line based on experience and the candidate’s specific salary expectations. The current proposals will likely require the employer to provide a more definitive salary figure from the get-go.
While this might seem inconvenient to employers, the government argues that publishing pay information can encourage employers to evaluate roles before recruiting and introduce greater consistency when setting pay. It also points to the information imbalance that can exist between employers and candidates: employers typically know much more about the organisation’s pay structures than applicants do.
For employers, increased pay transparency could also mean fewer interviews with candidates whose salary expectations are fundamentally misaligned.
Most importantly, transparent recruitment can expose inconsistent pay decisions before they become an equal pay problem.
How Would the Equal Pay Proposals Affect Payroll?
Recruitment and payroll are sometimes treated as separate processes. A vacancy is created by HR, a candidate is selected, an offer is made and the individual eventually appears on the payroll.
Greater pay transparency could make that separation less comfortable.
Employers can have legitimate reasons for paying people differently. Indeed, the consultation specifically considers the “material factor defence”, under which an employer may justify a difference in pay where it is attributable to a material factor that is neither directly nor indirectly discriminatory.
Greater transparency could make the reasoning behind pay decisions much more visible, reinforcing the importance of having accurate, consistent and accessible information about:
- Salary and pay ranges
- Job roles and grades
- Allowances and bonuses
- Benefits and other financial rewards
- Changes to pay over time
- Reasons for significant pay differences
- How new starters are positioned within existing pay structures
How Can PeoplePay Global Help You, The Employer, in Navigating This Proposed Legislative Change?
If the proposals come into force, employers will need to consider the following to ensure legislative compliance:
- What are we currently paying people in comparable roles?
- Where do new starters sit within our existing salary structure?
- Are there unexplained differences between employees doing similar work?
- How have salaries changed over time?
- Can we evidence the reason for a particular pay difference?
Accurate payroll data can form part of the evidence employers need to understand and manage their pay structures.
It also makes data quality increasingly important.
If payroll records are inconsistent, job titles are unclear or different pay elements are recorded differently across employees, identifying potential pay inequalities becomes more difficult.
PeoplePay Global can advise you on how your business can adjust to these proposed reforms to ensure continued legal compliance of your business.
Our expert team will be attuned to the exact data required for your payroll processing to ensure compliance.
Beyond this, PeoplePay Global can offer HR, hiring advise, employment contract drafting and more – whatever is required to take the hassle out of hiring and maintaining continued employment in a new legislative landscape for your business.
What Happens Next?
The government is currently seeking views on the proposals as part of a 15-week consultation. Responses will help shape the next stage of policy development.
While employers do not yet have a new statutory requirement to publish salaries in job adverts, the direction of travel toward greater pay transparency should not be ignored by employers.
Aside from the potential legal requirement for full pay transparency from the very beginning of the hiring process, the reform proposals represent a broader shift whereby employment transparency is prioritised over employer flexibility. Accurate, well-structured pay data informing your payroll processing will be more valuable than ever in this new landscape.
Get in touch with PeoplePay Global today to ensure that your business complies with the changing tide toward greater employer regulation, without the stress.