A proposed new law could significantly shift how South African companies handle recruitment and compensation.

The Fair Pay Bill, introduced in Parliament in June 2025, aims to drive salary transparency and reduce income inequality, according to legal experts from Cliffe Dekker Hofmeyr (CDH).

The bill would update the Employment Equity Act by banning employers from requesting a candidate’s past salary during hiring — unless a job offer has already been made and the candidate voluntarily discloses it. It also requires job ads to include a fixed salary or a defined pay range, and prohibits confidentiality clauses that stop employees from discussing their pay.

CDH’s employment law specialists say the legislation follows international trends in fair pay and aims to close persistent wage gaps, including gender-based disparities.

Key Proposals in the Bill:

• Employers must publish salary details up front when advertising roles.
• Past salary history can't be used in hiring unless certain conditions are met.
• Employees must be free to discuss their pay without restrictions.
• Employers will need to review pay structures and update HR practices accordingly.

These changes could improve transparency and attract better-matched candidates while protecting employers from discrimination claims, the experts say. It could also empower workers with more bargaining power and insight into pay expectations.

However, the bill may pose challenges for industries with inconsistent pay structures or limited market data. Smaller businesses might struggle to comply due to resource constraints.

CDH also noted that revealing pay bands could affect competition among employers, though the bill allows broad salary ranges to maintain flexibility.

Next Steps:
The bill will undergo legal review and be opened for public comment before being debated in Parliament. If passed, businesses will need to update recruitment policies, train HR teams, and consider tools for fair compensation benchmarking.

CDH advises employers to audit their current pay structures and document reasons for any pay gaps, including factors like skills, experience, or performance.

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