The Government's pay transparency plans move forward: what REC members need to know

The Government has confirmed plans to introduce new pay transparency laws, requiring employers to publish salary information when advertising jobs.

Ministers have indicated they want to move quickly, with legislation expected within the next six months and further stakeholder engagement taking place over the coming months.

While the direction of travel is now clear, many of the practical details are still to be worked through. The REC is already engaging with officials to ensure the new requirements are workable for recruiters, employers and candidates.

What has been announced?

The Prime Minister has announced plans for a new "Say What You Pay" law that would:

• Require employers to publish salary information in job adverts.
• Require salary information to be provided to candidates before interview where a role is not publicly advertised.

The Government says the changes will help jobseekers make more informed decisions, improve transparency in the labour market and help tackle pay inequalities.

The proposals follow a government consultation, which ministers say found support from 94% of respondents, including 93% of businesses.

Alongside the planned legislation, the Government is encouraging employers to begin including pay information in job adverts now rather than waiting for the law to change.

Why does this matter?

The REC supports the principle of greater pay transparency.

Recruitment businesses see first-hand the inefficiencies created when candidates and employers do not have a clear understanding of the salary on offer.

Our members report that candidates can interpret a lack of salary information, or wording such as "salary dependent on experience", as a sign that a role is likely to be paid at the lower end of the market.

This can deter suitable candidates from applying whilst also resulting in employers spending time interviewing people who ultimately decide not to accept the role. Greater transparency can therefore improve recruitment efficiency, helping candidates focus on the right opportunities whilst reducing wasted time for employers, recruiters and jobseekers alike. It can also help identify potential inequalities earlier in the hiring process.

However, for transparency to be meaningful, salary ranges must be realistic and genuinely achievable.

A very broad salary range could technically comply with the legislation whilst providing candidates with little useful information. There will also need to be clarity on how bonuses, commission and other forms of remuneration are presented.

The REC's existing End Salary History guidance already encourages recruiters to obtain clear salary ranges from clients and ensure they reflect the skills and experience required for the role.

At the same time, determining an appropriate salary range is often context-specific, reflecting factors such as sector, location, responsibilities and experience. As the trade association for the recruitment industry, the REC has significant expertise in how salary information is established and communicated in the labour market. We look forward to working with Government on guidance that supports realistic and meaningful salary ranges whilst remaining practical for employers and recruitment businesses.

What is the REC saying?

The REC has already begun engaging with government officials on the detail of the proposals.

Our key message is that responsibility for salary information must sit with the employer.

Recruitment agencies should not carry legal risk for inaccurate or incomplete salary information provided by clients. Any new obligation should be framed around employers being responsible for supplying accurate salary information before a role is advertised.

We have also sought clarity on how the proposals will apply to temporary recruitment and agency work, including where an employment business is advertising temporary assignments.

What happens next?

Officials have indicated that stakeholder engagement will continue over the coming months as the legislation is developed, with further roundtables and discussions expected.

The REC will continue to engage closely with Government, drawing on members' expertise to help shape the detail of the proposals.

While there is broad support for greater pay transparency, the detail will matter. The REC will continue to press for rules that deliver meaningful transparency for candidates while remaining practical and proportionate for recruiters and employers.

We will keep members informed as the proposals develop and as further opportunities to engage arise.