UK Salary Transparency Consultation: A Small Business Guide
Updated: 2 days ago
Guidance for small employers on the UK salary transparency consultation, and the practical steps to take now.
The UK government is asking whether every employer should be required to state pay in their job adverts.
If the idea becomes law, vague wording such as "competitive salary" would no longer be enough.
The consultation opened in July 2026 and closes on 27 October 2026. Alongside advertised pay, it floats a new enforcement body with audit powers and compulsory pay reviews for employers found to be paying people unfairly.
Nothing has been legislated yet, but the direction of travel is clear, and small employers can start preparing sensibly today.
What the government is proposing
Pay information in every recruitment process
Employers would state a set salary, a pay range or a benchmark rate. Where a role is not advertised, the same details would have to reach candidates in writing before any interview.
The precise format is still undecided, but the aim is simple: people should know what a job pays before they apply.
A new pay enforcement body
The proposed regulator could examine how you pay your staff, ask to see your pay data and order a review of your practices.
Crucially, it would not need to wait for a complaint before stepping in.
Automatic pay reviews
Where unfair pay is identified, a full review of pay would follow automatically. At present that rarely happens, even when a claim succeeds.
Wider equal pay rights
Equal pay claims today mostly compare men and women doing similar work. The consultation suggests extending those rights to race and disability, which would give more of your employees grounds to question their pay.
A ban on salary history questions
Employers would also be barred from asking candidates what they currently earn, so a previous salary could no longer anchor your offer.
Why this matters for small employers
The effects would reach well beyond the wording of your adverts:
Your team will see the numbers. If a new hire's advertised salary is higher than what a current colleague earns for the same role, you will need a clear explanation ready.
You need genuine market data. Guessing leads to overpaying, which costs money, or underpaying, which loses candidates and invites claims.
Offers must stand on the value of the role. Without salary history, you have to decide what the job is worth independently of the person applying.
Two practical steps to take now
There is no need to panic. A consultation is only the first stage, and any new law would take time to arrive. These two steps are worthwhile whether or not the proposals go ahead.
1. Advertise by seniority level
If a vacancy could suit either a junior or an experienced hire, avoid one advert with a very wide salary range. Publish two instead: a junior role with a lower pay band and a senior role with a higher one.
Tighter ranges attract the right people at the right level and make candidates easier to compare. It is better recruitment and a stronger employer brand, whatever happens with the consultation.
2. Be ready to justify every pay decision
If two colleagues do similar work for different pay, could you explain why? Pay that was set by whoever negotiated hardest, or by gut feel at the time, is a problem waiting to surface.
Review your current team, look for inconsistencies and correct anything you cannot defend.
Reforms to casual work are also on the way: read our guide to the 2027 zero-hours contract reforms.
Get your pay structure in order early
At Progressive HR we help small businesses review what they pay, benchmark it against the market and build pay decisions they can stand behind.
If you would like to understand how salary transparency could affect your business, get in touch for a conversation.
