Ever applied for a job that didn’t advertise the salary, only to be disappointed when you discover it’s paying £10k below what you’re looking for?
Salary transparency is when an employer tells you the salary upfront, and luckily, it’s an emerging trend with laws and guidance rolling out across the EU and America. Will the UK follow suit? We hope so, as it’s hugely beneficial to employees and jobseekers.
Here’s the “state of pay” in other countries and why we may see more roles advertising a salary in the near future.
Are there salary transparency laws in the UK?
No. The closest we have in the UK is the Equality Act. Under the 2010 Equality Act, employees in the UK performing equal work must receive equal pay, regardless of gender. There are cases where a difference in pay can be justified such as length of service, experience, and geography. So for example, if you’re a female working remotely in the countryside the law does not prevent a man working in London doing the same job from earning more.
Employers following best practice should:
- Have an equal pay policy
- Create transparent job descriptions and job titles
- Have grading structures and systems
- Undertake job evaluation schemes such as performance reviews.
There’s also no law against telling colleagues or prospective applicants your salary. Even if your employer has made you sign something like a pay secrecy agreement.
Of course, the best companies are proactively disclosing salaries within their job ads and advocating for full pay transparency.
Why should you care about salary transparency?
Pay transparency evens the playing field. Employees and applicants can make sure they’re fairly paid. That could mean receiving the same pay as other candidates with a similar set of skills and experience.
For those who are newly graduated, transitioning between industries, or upskilling into a more senior role, without an “in” it’s nearly impossible to know the going rates. Salary transparency means everyone has the same information up-front, including salary and benefits. It can also help prevent or reduce the amount of bias when it comes to pay, as some employees are more likely to advocate for themselves.
There’s a benefit for businesses too. If all employers release salaries, businesses will be able to work out where they sit and if they’re being competitive enough to entice the best staff. This is especially important considering the huge skills shortages that employers are experiencing across the UK, with employees leaving roles for better pay.
By knowing what their competitors are paying, employers can ensure that they’re continuing to get the best applicants by offering better or equal pay and benefits.
Taking a transparent stance also shows jobseekers that a company cares about creating an equitable workforce and getting rid of pay gaps. That’s very appealing to jobseekers looking for employers with values that match their own.
By putting salary transparency laws into place, jobseekers know where they stand, and so do employers.
What are the laws like elsewhere?
The US
In the US, there’s some exciting progress being made.
As well as all states following the Equal Pay Act, which is similar to the current rules in the UK, some states are putting pay transparency rules in place.
In 20 states of the 50 states, there is a law in place regarding further transparency. For many of these, this is around an employee’s right to disclose their salary to others without fear of repercussion. Technically we already have these rules in place here. 12 states go a bit further, which could be a sign of things to come, all across the US and here in the UK.
Colorado currently has the most impressive pay transparency laws. Employers must post wage and benefits information for all promotion opportunities and job openings, including remote roles that can be performed anywhere.
To hold employers to account, they must ensure equal pay and keep a record of all employees, even 2 years after they’ve left.
State law also ensures that salary cannot be reliant on an applicant’s salary history – so an employer cannot pay you less just because you were earning less before and as an employee you’re allowed to freely discuss salary.
California was the first state to pass a transparency law in 2018, and keen to keep up with Colorado, these laws are being updated to mirror those above.
Other states with pay transparency laws allowing applicants to find out the pay scale at some point during their application process include New York State, Washington, Maryland, and Connecticut.
In the US, the laws can be country-wide, state-wide, and even city-wide. This means some cities have salary transparency laws in place that aren’t currently state-wide.
Chicago currently has a proposed bill to enforce employers within the city to state salary ranges in job postings and it has been suggested that this could be rolled out state-wide.
The EU
Now that the UK has left the EU, we don’t have to abide by EU law. But this doesn’t mean that we might not begin to make similar salary transparency laws to our neighbours.
The EU parliament has approved a proposal for pay transparency and has begun negotiations with member states.
This new ruling demands that companies with at least 50 employees must disclose information making it easier for employees to compare salaries and expose existing gender pay gaps.
If a gender pay gap of 2.5% or above exists, employers will work to develop a gender action plan.
Employers are also not allowed to prohibit workers from disclosing their pay.
Prospective employees should also be able to access pay information, without having to request it and employers will be prohibited from asking about previous pay. So essentially, the salary for a role should be published.
The plans going through the EU will doubtless take time, but employers are being encouraged to think ahead and start working towards these guidelines now. Momentum is forming.
What to do when applying for a job with no salary
When applying for a role without an advertised salary, it’s easy to feel lost. Job applications are hard work, so spending time and effort on an application only for the salary to be well below your expectations can feel like a total waste of time.
The most important thing is to start off by knowing your worth as an applicant. Use the ValueMyCV tool to assess how much your CV is worth. If the calculator is well below what you think, it’s probably time to give your CV some love. Make sure you showcase the skills and experience that employers are looking for.
You should then explore roles in your area and read through our salary data which will help you see how salaries have changed year-on-year, and the top companies hiring in your area.
It’s also worth remembering that just because there isn’t a law in place, it doesn’t mean that an employer won’t disclose. Before applying to a role, you could ask the hiring manager if your salary range is in their hiring bracket. They may not be able to tell you the salary range but they may be able to answer yes or no.
Will the UK follow suit with salary transparency laws?
It’s looking positive! On International Women’s Day 2022, the UK’s Minister for Women launched a pay transparency pilot as part of a push to level up pay and employment opportunities for women.
The participating employers will publish salaries in job ads. This scheme was borne out of evidence showing listing a salary range on a job ad and not asking applicants to disclose salary history helps to provide a firm footing for women to negotiate pay on a fairer basis.
It’s clear, with this initiative, that the government sees pay transparency as a crucial aid to achieving pay equality and suggests a law may come into a force similar to the ones popping up across America and the Eurozone.
As UK jobseekers, we can expect to gain increasingly easy access to salary information.
Source: Adzuna
