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In a move to address wage inequality and promote fair compensation practices, South Africa’s Build One South Africa (BOSA) party introduced the Fair Pay Bill to Parliament in June. If passed into law, the bill will usher in a new era of pay transparency by requiring employers to adopt open, accountable, and equitable remuneration practices across all sectors, according to Trusiac.Â
The proposed legislation is part of a larger international push for pay equity, and aligns South Africa with global efforts such as the European Union’s Pay Transparency Directive and various pay transparency laws emerging at the state level in the United States. The bill is seen as a tool for justice and as a strategy for modernizing the labor market and cultivating a more inclusive economy.
Key Reforms to Promote Transparency and Equity
At the heart of the Fair Pay Bill is a set of reforms designed to increase transparency around how wages are determined and communicated. One of the most significant changes is the prohibition of salary history inquiries during the recruitment and appointment processes.Â
Employers would no longer be allowed to ask candidates about their current or previous pay — a practice that has long contributed to persistent wage gaps, particularly for women, young people, and historically marginalized communities.Â
The only exception to this rule would be if a candidate, after receiving a job offer, voluntarily asks for their salary history to be taken into account.
The bill also mandates that employers disclose the salary or salary range for every advertised position, whether the role is newly open, part of an internal promotion, or a transfer opportunity. Vague descriptors such as “market-related pay” will no longer be permissible.Â
By requiring clear salary information upfront, the bill aims to reduce information asymmetries that often place candidates at a disadvantage and reinforce inequitable pay practices.
In addition to transparency during recruitment, the bill grants employees the explicit right to discuss their compensation with colleagues. This measure is intended to dismantle the culture of secrecy that has historically surrounded pay discussions in the workplace, thereby empowering workers to advocate for fair treatment without fear of retaliation.
Another cornerstone of the legislation is the requirement for employers to establish and document salary structures and pay bands for each position. These documented frameworks would provide a basis for justifying pay decisions, identifying disparities, and ensuring compliance with the Employment Equity Act. The move toward standardized, well-documented compensation practices is expected to support more consistent and defensible remuneration decisions.
Tackling Systemic Inequality and Supporting Living Wages
The Fair Pay Bill addresses deeper structural issues that perpetuate income inequality. By eliminating reliance on salary history, the legislation breaks the cycle of suppressed earnings that can follow individuals throughout their careers.Â
Transparent compensation frameworks, in turn, are expected to attract top talent, support accountability, and position employers as leaders in equitable labor practices.
The bill also contributes to ongoing national and global conversations about living wages. By promoting transparency, it encourages employers and policymakers alike to assess whether current wage levels meet the basic needs of workers — such as housing, education, food, and transportation.
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In reinforcing existing corporate disclosure obligations under the amended Companies Act of 2008, the Fair Pay Bill supports a comprehensive change in South Africa’s business environment toward openness, fairness, and social accountability.
What Employers Should Do to Prepare
For employers, the potential passage of this legislation represents both a compliance challenge and an opportunity.Â
Companies will need to take proactive steps to audit their existing pay structures, establish clear and justifiable salary ranges, and eliminate outdated practices like salary history inquiries from their recruitment processes. Human resources policies, training programs, and internal systems may all require updates to ensure alignment with the new requirements.
Forward-thinking organizations may choose to go further by conducting voluntary pay equity analyses. By identifying and addressing disparities before the law takes effect, these companies can mitigate legal risk and demonstrate a genuine commitment to fairness.
