Malcolm Rivera | July 24, 2025
The newly proposed fair pay bill could have a significant impact on employers and employees, and could change recruitment practices and pay transparency across the country.
This is according to Legal Experts at Cliffe Dekker Hofmeyr (CDH)Employment Law Director Yvonne Mukefa, and his companions of Sasin Naido and Sato Makova.
The Fair Salary Bill was submitted before the Diet in June 2025. The company aims to amend the Employment Equity Act of 1998 by prohibiting employers from using candidates' past pay history during the recruitment process.
It also requires employers to disclose fixed pay or pay ranges when advertising jobs, classifying or grading positions, or appointing or appointing staff.
Legal experts say the law is designed to promote equity, reduce inequality and promote transparency in the South African labor market.
“The purpose of the bill is to promote compensation transparency and help address issues related to wage disparities, gender pay disparities and the status of the Gini coefficient in South Africa,” says CDH.
“It aligns with the global trends in wage transparency and promotes responsible business practices.”
One of the bill's main provisions is a prohibition against seeking a previous salary for an applicant currently employed, unless two conditions are met.
These terms mean that the employer has already placed an employment offer and the candidate voluntarily requires in writing to consider previous compensation.
Additionally, employers are expected to establish and share the pay or range of pay for each role. Candidates can discuss salary only within the specified range.
Another major change proposed by the bill is the removal of confidentiality clauses that prevent employees from discussing their pay with others.
Although it already exists under the basic conditions of the Employment Terms of Employment Act, the bill goes a step further by expressly outlawing such confidentiality clauses.
This allows employees to freely share current and past rewards with their colleagues. CDH also said these changes could bring many benefits.
“Transparent rewards and advance payment information can attract truly interested and qualified candidates and reduce wasted resources in discrepancies applications,” the expert said.
“It may also help employers to reduce exposure to unfair work practices and discrimination claims. It can be expensive and can damage reputation.”
“Transparent wage practices can enhance employee engagement and retention by promoting confidence in management decisions,” they added.
Bill challenges and next steps
The law firm has admitted that the bill is not without challenges. CDH warned that it may be difficult to assess and determine the value of jobs that do not have available historical reward benchmarks.
This is particularly relevant in industries with informal or evolving wage structures, such as jobs in high-freelance sectors and emerging specialist fields.
Small, medium and micro-enterprises (SMMEs) can also struggle with compliance due to limited financial and administrative resources.
“To address these challenges, the bill must establish provisions to mitigate or protect small employers and industries in an atypical workforce,” advised the CDH.
Another side effect is that competitors can see each other's pay ranges, which can affect market competition.
However, CDH noted that the bill allows employers to promote a wide range of pay bands, providing some flexibility without setting strict calculation guidelines.
For employees, the bill represents a significant benefit of negotiating power. Job seekers will no longer be bound by previous revenue unless they choose to disclose.
Additionally, they will gain more clear insight into the salaries being offered before applying for a role. “Employees acquire the explicit right to openly discuss compensation with others,” CDH noted.
With the bill being introduced to the Legislature, there will be a few steps to take before it can be handed over to the law.
First, Congress's legal advisors will review the bill and ensure it is compliant with legislative standards and is classified appropriately. It will then be published in the Government Gazette for public comment.
The Employment and Labor Portfolio Committee will provide detailed scrutiny and discussion, and will then be formally introduced in Parliament for further deliberations, potential revisions and voting.
If it is enacted, employers face various compliance responsibilities. “Employers must update their recruitment and wage practices, modify applications, modify interview protocols, and adapt internal policies that correspond to payroll settings,” the CDH warned.
HR teams and management training are also required to ensure that organizations understand and adhere to the new rules.
CDH recommended that businesses utilize compensation planning tools and benchmarking software to access accurate and up-to-date market pay data.
This helps employers move away from their reliance on pay history and make informed, impartial pay decisions.
“Employers need to assess the compensation structure and conduct audits to identify unfair pay gaps. They need to compare wages to address roles, race, gender, background and unconscious bias,” a CDH expert said.
“They also need to keep a record of justification for differences in wages, including the skills, tenure, qualifications, experience, and performance of a person.”
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
