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There is no legal requirement for an employer to disclose remuneration to potential employees when they apply for a job, says Imraan Mahomed, a director in employment law at Cliffe Dekker Hofmeyr.
Despite this, Mahomed said that an employer could make an applicant an offer at the time they disclose their own current salary. An employer is also allowed to ask an applicant how much they get paid as part of the interview process.
According to Mahomed, the government published a draft version of the Companies Act Amendment Bill for public comment in late 2021 that aims to amend certain provisions of the Companies Act and introduce a wage ratio report.
The amendment would require publicly-traded companies and state-owned entities to produce a report that outlines the difference between the company’s highest and lowest-paid employees, which would give prospective employees a better idea of what to expect.
According to Cliffe Dekker Hofmeyr, the wage ratio report will have to disclose, amongst other things:
- The total remuneration of the highest paid employee;
- The total remuneration of the lowest paid employee;
- Average and median remuneration of all employees; and
- The remuneration gap reflects the ratio between the lowest and highest paid employees.
Under the proposed laws, the report would also have to be published on an annual basis and be approved by shareholders.
This will align South Africa with standards of international best practices, with UK companies already required to provide reasons for changes in pay ratios and Australian entities being at the whim of their shareholders who – if remuneration outlooks are voted against too many times – can halt business.
Mahomed added that there have not yet been any cases in South Africa dealing with disputes surrounding the non-disclosure of how much a job offers applicants.
Job recruitment website Glassdoor, said that having pay transparency within companies can ensure that issues like the wage gap are mitigated.
Understanding whether or not workers are getting paid what they feel they are worth is one of the key drivers of job satisfaction and retention, it said.
How best to negotiate
Glassdoor provides that to best negotiate pay with a future employer as an applicant, one must do research on a realistic salary range for the position and have a plan in place when it comes to answering a few questions.
The group provided the following tips:
- Have a salary range rather than a single figure – This can help you compromise or negotiate easier
- Don’t sell yourself short – a common mistake is forgetting benefits from total compensation, one should recommend a salary and add that they expect additional benefits.
- Practice your pitch at least once before the actual negotiation – Practice communicating your proposal.
- Be gracious – No matter the outcome of the negotiation, be understanding and appreciative to avoid coming off as demanding.
- Be confident in your delivery – It is important to show that you believe in yourself.
- Avoid accepting the first offer – If you need time to evaluate an offer, you can ask for more time to consider it.
- Understand your leverage – your negotiating power depends on your current employment situation. If you are currently unemployed, you might need to set your standards lower than a person who is already in a high-paying job.