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MAKE UK: Salary transparency risks yet another compliance headache for employers when it comes to employment law

Make UK Executive Director for Legal Jay Bhayani said:

“This may seem like a good policy on the surface. But making it a legal requirement risks becoming yet another compliance headache for employers when it comes to employment law.

“Greater pay transparency may be well intentioned, but there is a risk of unintended consequences for both employers and employees. Publishing salaries for new recruits can create tension where market rates have moved ahead of the pay of existing staff, something which is common in the private sector.

“Employers also need the flexibility to recruit the best person available and set pay according to their skills and experience. They may not know until after interview whether they want to recruit someone at the more junior or senior end of a role, or what scope there is to negotiate. If employers are effectively required to make a binding decision on pay before they know who they are recruiting, some may become more cautious about hiring altogether.

“Salary is only part of the picture. Candidates may be prepared to accept a lower salary for greater flexibility, progression opportunities or a strong workplace culture. And total remuneration can be complex, encompassing bonuses, overtime, pensions and other benefits which can vary considerably between employees.

“If this requirement is introduced, it is important that employers are able to advertise a meaningful salary range rather than being tied to an overly prescriptive figure.”

Make UK represents more than 25,000 manufacturers across the UK, a sector which accounts for around 10 per cent of the economy, supports 2.6 million jobs and accounts for around 42 per cent of UK exports.

In addition to our policy expertise, Make UK has one of the largest teams of employment lawyers and HR professionals in the UK, supporting more than 1,000 companies each year. This means we can offer both a policy perspective and practical insight into what changes to employment law will mean for employers.

Jay Bhayani, Make UK’s Executive Director for Legal, leads our HR Consultancy and Training function, advising businesses on complex people and employment issues.

For more information, please contact:
MAKE UK
Broadway House
Tothill Street
London
London
SW1H 9NQ
Tel: +44 (0)207 6541515
Email: PSwift@makeuk.org
Web: https://www.makeuk.org/

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