Pay transparency: The real risk lies in the evidence

For many years, UK employers have commonly advertised vacancies using phrases such as “competitive salary” or “salary dependent upon experience“, providing little indication of what a role actually pays.

That approach may soon change.

The Government’s Equal Pay and Pay Discrimination Consultation includes proposals that would require employers to provide pay information during recruitment, either in a job advert or, where no advert is published, in writing before interview. The consultation is considering whether employers should disclose a fixed salary, a salary range i.e. £50-£60,000 or another form of pay benchmark.

Why does salary transparency matter?

The rationale is straightforward. Where candidates do not know what a role is intended to pay, outcomes may be influenced by factors unrelated to the value of the work, including negotiating ability, previous earnings and subjective decision-making.

The proposals sit alongside existing equal pay protections rather than replacing them. Equal pay rights already exist under the Equality Act 2010 and employers are required to justify pay differences where legal challenges arise. Greater transparency may simply make those differences easier to identify and question.

The challenge for Employers

Many organisations do not operate rigid salary structures. Recruitment decisions often involve balancing experience, specialist skills, recruitment difficulties and market conditions.

This flexibility can create challenges when salary information becomes public. For example, a newly recruited employee may be offered a higher salary than a longer-serving colleague performing comparable work because of market pressures at the time of recruitment.

That does not automatically create legal liability. The Equality Act 2010 recognises that differences in pay may be lawful where they arise from a genuine material factor unrelated to sex discrimination. The difficulty for organisations is often evidential rather than legal.

Exposing existing risk

Salary transparency does not create pay disparities, but it may expose disparities that already exist within organisations.

Many pay structures develop over time through promotions, retention payments, market adjustments and individual negotiations. Whilst each decision may have been reasonable when made, the cumulative effect can sometimes produce inconsistencies that are difficult to explain years later.

An advertised salary may prompt employees undertaking comparable work to question whether differences in pay can be justified. Where employees are performing equal work within the meaning of the Equality Act 2010, employers should be able to evidence the reasons for any pay disparity.

Contemporaneous records are far more persuasive than explanations produced after a grievance or tribunal claim has been raised.

The evidential burden

One practical consequence of greater transparency may be an increase in scrutiny without a corresponding increase in legal liability.

Employees who gain access to comparative pay information may be more likely to raise grievances or seek explanations for pay differences. In many cases, the key issue will not be whether a legitimate justification exists, but whether the employer can prove that justification with contemporaneous evidence.

Historic recruitment decisions

Consider an employer who recruits a Head of Sales in 2026 on a salary of £75,000 because market conditions make recruitment particularly difficult. Three years later, market conditions have stabilised and comparable roles are advertised at lower salaries.

The employer may have had entirely legitimate reasons for offering £75,000 at the time. The challenge may not be explaining the decision but proving why it was made if no records exist documenting the recruitment difficulties, market pressures or business rationale.

As transparency increases, the quality of the supporting evidence becomes just as important as the rationale itself.

What should Employers be doing now?

Rather than waiting for legislation, employers may wish to review their pay governance now by:

• Reviewing pay structures to ensure differences are supported by objective criteria.
• Auditing comparable roles to identify inconsistencies and potential equal pay risks.
• Reviewing recruitment practices where salary negotiations play a significant role.
• Improving record keeping so that remuneration decisions can be justified if challenged.
• Assessing whether existing salary bands are meaningful, defensible and reflective of market conditions.

A potential opportunity

Whilst the proposals may increase compliance obligations, there may also be practical benefits.

Clear salary information can improve recruitment efficiency by attracting candidates whose expectations align with the available budget. Employers with transparent and consistent pay practices may also find it easier to build trust within their workforce, which may reduce grievances and staff turnover.

Looking ahead

The consultation remains ongoing and many of the details have yet to be determined.

The question for employers is whether existing remuneration decisions can be clearly explained, objectively justified and consistently applied across the workforce.

If salary disclosure requirements are introduced, companies that have already reviewed their pay structures and documented the reasons behind key remuneration decisions are likely to be in a much stronger position than those encountering these issues for the first time when a vacancy is advertised.

How Pinney Talfourd can help

With greater pay transparency potentially on the horizon, now is a good time for employers to review their pay structures, recruitment practices and record keeping.

Our specialist Employment team can advise on equal pay obligations, help identify potential areas of risk and ensure your employment practices are prepared for future changes.

To discuss how these proposals could affect your organisation, call your local office on 0800 011 1195 or email .