On the 30th March 2023, the European Union Parliament adopted new rules on pay transparency which will end pay secrecy within organisations. The new rules are part of the wider rules to ensure equal pay and reducing the equal pay gap which for Europe is reported at 13%, with the UK currently having an average of 13.2% for those submitting in the 22/23 period (Mar/Apr 23, as at 13th April 23).

But do we need a similar law in the UK? As HR consultants and reward specialists, we often come across situations where organisations are reluctant to share salary data with its staff. Indeed, we still come across restrictive clauses in contracts that prohibit staff talking about salaries. Even now, staff often tell us they do not feel they can raise pay level issues with management, it still feels like it is a taboo subject. Often they are informed, that they can’t be told what their colleagues are earning, as this is either sensitive business or personal data.

This practice could fall foul of the current Equality Act 2010 (EA2010) Section 77, which effectively stops the prevention of pay disclosure in relation to protected characteristics. Based on that, it would seem we don’t really need a pay transparency regulation as under EA2010 this pay information should be disclosed. However, such information is only required to be disclosed when requested, and only when in connection with protected characteristics. This effectively means company’s can hide inequalities until such time as a direct question arises to expose them.

There are of course many organisations that freely operate under a pay transparency policy. However, there are many more who do not, and in these days of pay equality, still operate under a shroud of secrecy. Therefore, I would argue that we do need regulations that enforce pay transparency. We need a vehicle to remove that shroud and assist in driving towards not just pay equality for gender purposes, but across the workforce.

If you want to know how to drive pay transparency in your organisation, email me and I will be pleased to give you a few tips.

andrewc@rewardrisk.co.uk