Equity by design: From compliance to competitive edge

The introduction of the Fair Pay Bill in June 2025, following the recent amendments to the Companies Act marks a significant shift in corporate culture. This shift is rooted in fairness, transparency and accountability and reflects the evolving expectations we’re seeing in boardrooms across the country.  

While the Companies Act amendments focus on external disclosures within the remuneration report, including the so-called ‘wage gaps’, the Fair Pay Bill proposes a different type of transparency. When the Bill is enacted, employers will be prohibited from asking about a candidate’s previous salary and will be required to disclose clear salary ranges in job advertisements. 

But this is more than a compliance exercise or a regulatory update. Taken together, the new legislation works together to dismantle entrenched pay disparities within organisations. 

Beyond compliance, these changes represent a once-in-a-generation opportunity to reimagine how we define value, reward talent and build inclusive workplaces. 

South Africa has long recognised the principle of “equal pay for work of equal value” through the Employment Equity Act. Yet enforcement has been inconsistent, and transparency scarce. 

This began to shift in 2019 with updates to the EEA4 form, which introduced the concept of a “fair pay policy”. Since then, employers have been required to submit internal pay gap data across occupational levels to the Department of Labour and demonstrate efforts to close the pay gap.

Now, the Fair Pay Bill builds on that foundation with practical, enforceable measures. It proposes that all job advertisements include pay ranges, prohibits the use of salary history in determining offers and protects the employees’ rights to discuss their pay openly.

In short, it moves fair pay from principle to practice, bringing clarity, accountability and momentum to a long-standing commitment. 

At the heart of these new requirements lies a long-standing principle: pay fairness. Any leading reward philosophy is built on the foundation of internal and external equity. What’s different now is that these principles are no longer confined to policy documents or board room discussions—they’re being brought into the open.

Where employers once determined what was “fair and responsible” behind closed doors, transparency now invites employees to participate in that assessment. It shifts from unilateral decision-making to shared accountability.

Supporters of increased pay transparency argue that it builds trust, attracts and retains diverse, high-quality talent, and reduces risk, bias and internal conflict through clear, documented reward philosophies.

But critics point out that: 

• Revealing salary information presents a risk of competitive disadvantage, providing competitors with insights that undermine a company's strategic advantage in attracting or retaining talent.

• Transparency can lead to dissatisfaction or envy among employees if they perceive discrepancies in pay that they deem unfair, in turn harming morale and reducing productivity.

• Instead of managing pay levels, transparency instead has an upward effect on pay, resulting in some cases in larger pay gaps between ‘top and bottom’.

Regardless of individual viewpoints, one thing is clear: the new reality demands discipline. Employers and their remuneration committees will need to take a more structured, data-driven approach to pay. As a starting point, organisations should:

1. Approve a fair and responsible pay policy that clearly outlines the principles guiding pay decisions. 
2. Measure and track internal wage gaps and pay equity markers using recognised methodologies and relevant lenses, on an ongoing basis.
3. Understand and justify outliers and track progress on resolving any anomalies.

Our Reward Manager App is designed to help our clients move beyond box-ticking, offering the opportunity to quickly assess gaps in internal pay equity, and understand the distribution of income within an organisation. You choose the metrics, whether its’s the minimum required for disclosure, or the broader indicators that help you tell your organisation’s story. The Reward Manager App simplifies compliance aligning seamlessly with the requirements of the EEA4, Companies Act Amendments concerning wage gap disclosure, the Employment Equity Act and Fair Pay Bill. 

Our tools are built to address the needs we see our clients grappling with, and to translate complexity into clarity, helping our clients lead with confidence, not react in crisis.

We believe that fair pay is the foundation of a high-performing, ethical organisation. This Bill helps move us closer to a future where remuneration is based on value created, not value inherited, and pay processes are transparent, structured and consistent.

Considered through the right lens, the Fair Pay Bill, the Companies Act amendments and EEA4 reforms don’t limit opportunity they unlock it. These changes level the playing field so that real opportunity can flourish.

Businesses that choose to lead this reform, rather than wait, stand to gain significantly. The key lies in understanding the true picture of fair pay within your organisation—grounded in facts, supported by analysis and guided by intention.   

If you’d like to explore how we can help you prepare, assess or enhance your fair pay strategy, contact one of our subject matter experts below.