Could Your Small Business Be Ready for the UK's Salary Transparency Changes?

The way UK businesses advertise salaries could be about to change. The government is consulting on new proposals that could require employers to include pay information in job adverts, alongside measures designed to strengthen equal pay enforcement.

For small business owners, this raises important questions: Are your recruitment processes ready? Can you explain how you set salaries? And what would happen if your current pay practices came under closer scrutiny?

The government's consultation on equal pay and pay discrimination, launched in July 2026, closes on 27 October 2026. While the proposals are not yet law, now is a good time for employers to understand what's being considered and review their approach to pay.

Here's what you need to know — and the practical steps you can take to prepare.

1. Salary information could become a standard part of job adverts.

One of the key proposals is to require employers to include pay information in job adverts. Where a role is not advertised, the proposal is for pay information to be provided in writing before the interview.

The consultation considers how this requirement might work in practice, including what salary information employers would need to disclose.

What this could mean for small businesses

For smaller employers, this could mean reviewing recruitment processes and making salary information clearer from the beginning.

Publishing a salary range can help candidates understand whether a role meets their expectations before applying. It may also reduce time spent interviewing candidates whose salary requirements do not align with the available budget.

How to prepare:

• Review current job descriptions and recruitment templates.
• Consider using realistic salary ranges that reflect the responsibilities and experience required.
• Make sure the proposed pay range is consistent with the budget for the role.
• Ensure anyone involved in recruitment understands how pay decisions are made.

These are practical steps businesses can take now, regardless of the consultation’s eventual outcome.

2. Equal pay enforcement could become stronger

The consultation also proposes establishing an Equal Pay Regulatory and Enforcement Unit to strengthen the enforcement of equal pay rights.

The unit’s final institutional home and precise powers are still under consideration. Proposed measures include greater powers to obtain pay information and evidence, alongside stronger investigation tools that could include requiring job evaluations or equal pay audits.

The consultation also considers changes to what employment tribunals can require following an equal pay breach. These include reducing exceptions to tribunal-ordered equal pay audits and requiring an employer to implement a non-discriminatory job evaluation scheme where an appropriate, up-to-date scheme is not already in place.

These proposals should not be interpreted as meaning that every employer found to have an unfair pay practice will automatically face a compulsory pay review. The measures being considered relate to particular enforcement and tribunal circumstances.

What this could mean for small businesses

Employers should be able to explain how they set salaries and why employees doing comparable work are paid differently, where differences exist.

A business may have legitimate reasons for differences in pay, such as relevant experience, responsibilities or specialist skills. The important thing is to make sure decisions are fair, consistent and supported by evidence.

How to prepare:

• Keep records of salary decisions and changes.
• Review job descriptions to ensure they accurately reflect responsibilities.
• Use consistent criteria when recruiting, promoting or increasing salaries.
• Check whether differences in pay can be explained by objective, job-related factors.

Keeping clear records can support better management decisions and make it easier to identify inconsistencies before they become more significant problems.

3. Pay discrimination protections could be strengthened

Another area covered by the consultation is the potential strengthening of protections against pay discrimination related to race and disability.

The proposals explore how protections could be brought more closely into line with the existing framework for sex-based equal pay. This does not mean that the consultation simply proposes extending the existing sex-based equal pay scheme unchanged to race and disability.

The details of any future changes will depend on the government's response to the consultation and any subsequent legislation.

What this could mean for small businesses

Employers should pay attention to whether their recruitment, pay and progression practices are applied consistently.

Small businesses may not have a dedicated HR team or formal pay framework, but that does not make consistency any less important.

How to prepare:

• Use clear, job-related criteria when setting salaries.
• Apply the same approach to comparable roles.
• Make promotion and pay progression processes as transparent as possible.
• Train managers to recognise and challenge potential bias in employment decisions.

A fair approach to pay is not only about compliance. It can also help employees feel valued and give managers greater confidence in their decisions.

4. What about asking candidates about their salary history?

Salary history and pay transparency have both featured in wider discussions about recruitment practices. However, a ban on asking candidates about their previous salaries is not confirmed as a proposal in the July 2026 equal pay and pay discrimination consultation.

Small businesses should therefore avoid treating a salary-history ban as an incoming legal requirement on the basis of this consultation alone.

A useful practice is to focus recruitment conversations on the salary budget for the role, the responsibilities involved and the candidate's relevant skills and experience.

This can help employers assess candidates against the role's requirements rather than relying too heavily on what someone earned in a previous position.



5. What should small business owners do now?

Although the proposals are not yet new legal requirements, businesses do not need to wait for the consultation outcome to improve their pay practices.

Here are five practical steps to consider:

1. Review your recruitment process. Check whether job adverts communicate salary information clearly and consistently.

2. Document pay decisions. Keep a record of the factors used to set starting salaries, approve increases and make promotion decisions.

3. Check for inconsistencies. Review comparable roles and consider whether differences in pay have clear, objective explanations.

4. Strengthen your internal processes. Make sure managers know how to handle salary discussions and apply pay criteria fairly.

5. Follow the consultation outcome. The government’s final response will help clarify which proposals, if any, move forward and what further action employers may need to take.

You do not necessarily need a complicated pay framework to get started. Even a small business can benefit from clear salary ranges, consistent decision-making and good record-keeping.

Don't wait for the rules to change before reviewing your pay practices.

Salary transparency is about more than putting a figure on a job advert. It's about building fair, consistent and explainable pay practices that support your business and your people.

With potential changes to recruitment and equal pay enforcement under consideration, small businesses have an opportunity to get ahead by reviewing their job adverts, documenting salary decisions and making sure managers understand how pay is determined.

Not sure whether your HR processes are ready? HR Toolbox can help. From reviewing recruitment practices to strengthening your people-management processes, we can help you identify gaps, build greater consistency and prepare your business for potential changes.

Get in touch with HR Toolbox today.

📞 0161 757 7576
📧 info@hrtoolbox.co.uk
🌐 www.hrtoolbox.co.uk