In 2024, I wrote an article exploring whether employees in South Africa are entitled to discuss their salaries with others.
What began as a fairly specific employment-law question led to a much broader conversation about pay transparency. At the time, my conclusion was that organisations should first define their pay philosophy, understand their data and then decide how transparent they are prepared to be.
Two years later, that conversation has moved on considerably.
Through recent consulting work with a European-based client, I have had the opportunity to work through the implications of the European Union’s Pay Transparency Directive. It has given me an interesting perspective on how Europe and South Africa approach the same underlying issue from different starting points.
Europe is placing more direct responsibility on employers to provide pay information. South Africa has traditionally focused more on an employee’s right to discuss their own pay, equal pay for work of equal value and regulatory reporting.
The two approaches are not the same – but they are moving in a similar direction.
Europe Is Moving from Pay Equality to Pay Visibility
Equal pay between women and men is not a new principle in Europe. What is changing is the level of information employers must make available for employees and candidates to exercise that right meaningfully.
EU member states were required to incorporate the EU Pay Transparency Directive into their national laws by 7 June 2026. The detail may differ between countries, but the direction is clear.
Employers will be expected to:
- provide candidates with information about the starting salary or salary range early enough for an informed discussion to take place;
- stop asking candidates what they currently earn or earned previously;
- use objective, gender-neutral criteria when setting pay and deciding salary progression;
- provide employees, on request, with information about their own pay and the average pay levels of men and women doing the same work or work of equal value; and
- report on gender pay gaps once the relevant employee thresholds and reporting dates apply.
The reporting requirements are being phased in. Employers with 250 or more employees will report annually, while those with between 100 and 249 employees will report every three years, with different commencement dates applying to the various employer-size categories.
Where reporting reveals a gender pay gap of at least 5% within a category of workers, which cannot be justified by objective, gender-neutral factors and is not corrected within six months, a more detailed joint pay assessment may be required.
This is not about publishing a list of everyone’s salaries.
It is about giving people enough information to understand whether pay decisions are fair, while requiring employers to show that differences are based on credible reasons.
South Africa Approaches the Issue Differently
South Africa does not currently have a single, comprehensive pay-transparency law equivalent to the EU Directive. However, our legislation already contains several important elements of pay transparency and pay equity.
Employees can discuss their own remuneration
As I explored in my earlier article, Disclosure of Salaries & Pay Transparency, section 78(1)(b) of the Basic Conditions of Employment Act gives employees the right to discuss their conditions of employment with fellow employees, their employer or another person.
Remuneration is part of an employee’s conditions of employment. This means that employers cannot simply assume that employees may be prohibited from discussing their own salaries because a confidentiality clause appears in their contracts.
Section 79 of the BCEA also protects employees against being prevented, penalised or unfairly treated for exercising a right provided by that part of the Act or for lawfully disclosing information.
This right relates to an employee discussing their own remuneration. It does not give someone the right to access, disclose or distribute the confidential salary information of another employee.
Equal pay does not necessarily mean identical pay
Section 6(4) of the Employment Equity Act addresses unfair differences in the terms and conditions of employees performing the same, substantially the same or work of equal value.
This is sometimes misunderstood to mean that employees performing similar work must always earn exactly the same amount.
That is not the case.
Differences may be fair and reasonable when they are based on relevant factors such as:
- experience or length of service;
- qualifications;
- competence;
- performance;
- levels of responsibility; or
- the scarcity and market value of particular skills.
The important point is that these factors must be genuine, consistently applied and free from unfair discrimination. A difference in pay is not automatically a problem – but an arbitrary or discriminatory difference may be.
South Africa also collects remuneration data
Designated employers must submit an EEA4 Income Differential Statement under section 27 of the Employment Equity Act.
The EEA4 provides remuneration information across occupational levels and assists in assessing income differences within organisations. Under the current Employment Equity Regulations, it is submitted to the National Minimum Wage Commission and is not a public document.
This illustrates one of the clearest differences between the two markets.
South Africa’s existing framework largely protects an employee’s ability to discuss their own pay, prohibits unfair pay discrimination and requires certain remuneration information to be submitted to the regulator.
The European framework creates more direct rights for candidates and employees to receive pay information from the employer.
South Africa May Be Moving Closer to the European Approach
The proposed Employment Equity Amendment Bill, widely referred to as the Fair Pay Bill, suggests that pay transparency is also becoming a more prominent legislative issue in South Africa.
An updated version was published for public comment in April 2026. If eventually enacted in its proposed form, it would introduce measures such as:
- requiring salary or salary-range information in job advertisements;
- requiring similar information for promotion and transfer opportunities;
- prohibiting employers from asking candidates about their current or previous remuneration; and
- preventing salary history from being used as the basis for determining a candidate’s future pay, subject to limited exceptions.
The Bill is not yet law and may still change as it moves through the legislative process. Employers should therefore distinguish clearly between South Africa’s current legal requirements and the measures being proposed.
Nevertheless, the themes are strikingly similar to those now being implemented in Europe: salary-range disclosure, less reliance on salary history and greater accountability for how pay decisions are made.
Why Salary History Is Becoming a Problem
One of the most significant developments in both the European and South African conversations is the move away from asking candidates what they currently earn.
For many years, salary history has been a standard part of recruitment. The employer establishes what the candidate earns, applies an increase and uses that figure to shape the offer.
The difficulty is that a previous salary does not necessarily tell us what the new role is worth.
If a candidate has historically been underpaid, basing the next offer on that salary simply carries the inequality into another organisation. Over the course of several career moves, the gap can become considerable.
A better approach is to determine:
- the value and scope of the role;
- the appropriate market range;
- the organisation’s internal pay structure; and
- where the candidate should sit within that range based on their relevant experience and capability.
This creates a more consistent basis for making an offer and shifts the conversation from what the candidate was paid previously to the value of the work they are being appointed to perform.
Transparency Begins Before the Job Advertisement
Consider two organisations recruiting for the same role:
Organisation A
Salary: Competitive.
Organisation B
Salary range: R850,000–R950,000, depending on relevant experience, capability and the scope of the appointment.
The second organisation gives candidates useful information before they invest time in the process. It also provides recruiters and hiring managers with a clearer framework within which to work.
However, publishing salary ranges without first understanding internal pay can create difficulties.
If an existing employee discovers that the organisation is advertising the same role at a range above their current salary, there will understandably be questions.
Before increasing external transparency, organisations should understand:
- whether roles are properly defined, evaluated and graded;
- whether salary ranges are credible and current;
- where existing employees sit within those ranges;
- whether starting salaries and promotion increases are decided consistently;
- whether material differences can be supported by relevant evidence; and
- whether HR and payroll data are accurate enough to support meaningful analysis.
This is where pay transparency moves beyond legislation and becomes a matter of organisational readiness.
What This Means for Executives in Both Markets
For a European executive, the immediate focus may be implementation: understanding the law in each country, preparing the required data, reviewing reward structures and ensuring that managers can apply the new rules consistently.
For a South African executive, the immediate legal requirements may be different, but the underlying business risks are already present. Employees may discuss their pay, unfair remuneration discrimination is prohibited, EEA4 reporting is required for designated employers, and further transparency legislation is now under consideration.
For multinational organisations, the practical answer is unlikely to be a different remuneration philosophy for every country. A more sustainable approach is to create a common set of principles, supported by local legal requirements and market realities.
That means building:
- a clear remuneration philosophy;
- consistent job families, levels and grading;
- defensible salary ranges;
- objective criteria for starting pay and progression;
- reliable HR and payroll data; and
- appropriate oversight of pay decisions.
This is not only an HR or Reward project. It involves business leadership, finance, payroll, recruitment, legal, employee relations and HR technology.
The Executive Question
My earlier article asked whether employees may discuss what they earn.
The answer in South Africa is that employees have a protected right to discuss their own conditions of employment. Europe is now going further by requiring employers to provide defined information to candidates and employees and by strengthening the consequences where inequality cannot be properly addressed.
Different markets may be moving at different speeds, but the broader direction is becoming difficult to ignore.
Pay decisions can no longer be treated as a series of private negotiations understood only by the manager who made them. They need to form part of a coherent, evidence-based approach to how the organisation values work and rewards people.
The real question for executives, whether based in South Africa or Europe, is not how much pay information they are comfortable sharing. It is whether their organisation is ready for greater transparency when it arrives.
Interested in delving deeper? Connect with Terrex today!
Looking forward to our next conversation
Keith Magill
Empowering your business through innovative human capital strategies
