gcwalisile khanyile | August 7, 2025
The Fair Salary Bill, recently introduced to Congress, is said to have set the foundation for creating a more equitable starting point for salary negotiations and career advancement by eliminating considerations of past pay in employment decisions.
The bill was introduced to Parliament as an amendment to the Employment Equity Act 55 (EEA) of 1998. It aims to transform recruitment and compensation practices to promote equity, transparency and equal opportunities in the workplace.
However, there are concerns that fair wage protection remains a critical limitation that it is still embedded in the unfair discrimination framework of the Employment Equity Act. In other words, unlike jurisdictions with independent equal pay laws, employees must prove unfair discrimination in order to successfully violate equal pay, rather than having a direct wage right.
Dr. Lewis Kahne, senior lecturer and MOOT court coordinator at the University of Johannesburg Law, said that historically low-wage individuals, many of whom are black women or young people entering the labour market, and that applying for new positions will not be constrained by previous low incomes.
“The requirement for employers to disclose compensation or compensation scope when advertising or hiring positions can increase transparency and reduce opportunities for subjective or biased wage setting, and job seekers can negotiate from informed positions, creating a larger average among employees doing similar jobs.
“This bill, if passed, provides employees with a better understanding of what other employees who perform the same role can expect to pay, which could ease the burden of proving wage discrimination,” Koen said.
He said compliance with the fair pay bill is likely to be demanding, especially for small businesses.
“These businesses will need to develop an internal framework for determining and documenting compensation scope, navigate new limits in wage discussions to train HR personnel, and adjust their recruitment practices accordingly. One potential intentional consequence is that to avoid scrutiny or legal risk, some employers will provide defaults by offering standardized midrange wages within the band.
He emphasized that several types of disputes could arise from the implementation of a bill in which an employee or applicant claims that the employer failed to disclose the appropriate compensation range or that the scope disclosed is misleading.
Others may argue that in violation of Section 6B of the bill, their past salaries were improperly factored into solicitation or recruitment decisions.
Professor Marius Van Staden, an associate professor at Wits School of Law, said the bill will have a major impact on multinational technology and AI companies operating in South Africa through two important mechanisms.
“Firstly, new Section 6A requires employers to disclose their advertising positions and their compensation ranges during the recruitment, promotion or transfer process, meaning companies with global wage measures need to transparently communicate South African compensation bands and potentially identify disparities in regional and international compensation levels.
“Second, Section 6B prohibits employers from enquiring candidates' past compensation information during recruitment, which prevents the general practice of using previous payroll to determine offers.
He added that companies in the AI and technology sector face unique challenges given the rapid evolution of roles and skill sets.
Amendments to the bill to the definition of “employment policy or practice” explicitly include “determining the compensation or scope of compensation for a position” during job classification and scoring.
“To ensure compliance with the principles of 'equal pay for equal work' or 'equal value work', companies need to establish a systematic job assessment framework that focuses on objective criteria such as required skills, qualifications, experience levels, and job responsibility rather than subjective assessment.
Regarding the new AI role, he said companies should develop a clear competency framework and regularly review job classifications as roles evolve, ensuring that the range of compensation reflects true differences between skill requirements and responsibility rather than historical bias or arbitrary volitional distinctions.
Some unintended consequences can affect sector growth and innovation. Mandatory disclosure of compensation scopes reduces the flexibility of corporate pay negotiations and may lead to wage inflation as an employee benchmark for the scope disclosed. This could have particular impact on startups and scale-ups that rely on flexible compensation structures, Van Staden said.
He added that the ban on investigating past rewards could make it more difficult for companies to assess appropriate reward levels for candidates with unique or highly specialized AI skillsets.
“Most importantly, continuing fair wage rights within discrimination frameworks can create legal uncertainty and compliance costs that disproportionately burden small tech companies without large HR or legal resources. It can also make companies overly conservative to avoid potential discrimination claims.
How can digital law experts and legal advisors help ensure compliance?
Van Staden said digital law experts can help develop compliant recruitment processes that avoid banned inquiries about past compensation while maintaining competitive employment practices. This includes the creation of job ads that include disclosure of appropriate compensation scopes and training to hire managers on permitted discussion topics.
“Legal experts will also help design compensation transparency policies that comply with the new Section 6A requirements, while protecting legitimate business interests. Additionally, they can develop internal audit mechanisms to identify potential equal pay violations before a discrimination claim occurs.
“Importantly, legal counsel can help businesses understand that fair pay clauses continue to be part of the framework of unfair discrimination. That is, objective job assessments and robust documentation of compensation setting processes are essential to protecting discrimination claims,” Van Staden said.
He added that while transparency requirements are consistent with trends in jurisdictions such as California, New York and the EU, South Africa's approach to maintaining fair wages within the Framework of Discrimination (EEA) is increasingly outdated.
Van Staden noted that South Africa's requirement to prove unfair discrimination against equal pay claims presents a higher burden of proof than many developed jurisdictions that can establish equal pay violations through statistical analysis without the need for proof of discriminatory intent.
“The ban on bills on payroll history enquiries is consistent with progressive practices, suggesting that South Africa is adopting some best practices while maintaining a more conservative overall framework,” he said.
Roger Solomons, a spokesman for Build 1 South Africa (BOSA), said mandatory disclosures prevent low bounce as employers are required to provide realistic and legitimate wage ranges, provide benchmark salaries to industry norms, and comply with the EEA's non-discriminatory clauses.
If a company consistently posts an unusually low range, it opens up to reputational risk, public scrutiny and intervention by the Ministry of Employment and Labor. More importantly, job seekers can move away from exploitative offers.
“We believe that the Fair Wage Bill will improve both economic equity and efficiency. Job Creation: We believe that if wage practices are fair and transparent, there is a high chance that more people will either enter the formal workforce or improve their participation in the labour market.
“Competitiveness: Transparent wage policies lead to better match-ups, lower turnover and strengthening employee morale. Companies that treat workers tend to be better than those who don't,” Solomons said.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
