Pay Transparency: Business Opposition
- Proposed government measures to increase pay transparency are facing pushback from business groups in the United Kingdom, who fear the changes could negatively affect hiring and compensation practices.
- Alex Hall-Chen, principal policy adviser for employment at the Institute of Directors, said some measures "would only serve to complicate the recruitment processes" and hinder firms from fairly...
- Tina McKenzie, policy chair of the Federation of Small Businesses, said, "There’s a world of difference between a big business and a small one." She added that it...
Business groups in the UK are actively resisting proposed pay clarity plans, fearing the changes will negatively impact hiring and compensation, a key point highlighted in this report. Small businesses are notably concerned about navigating detailed regulations without dedicated HR departments, creating a significant challenge for them. Alex Hall-Chen from the Institute of Directors stresses complications in recruitment, while the Federation of Small Businesses highlights the disparity between large and small firms. The government’s consultation includes the Equal Pay Regulatory and Enforcement Unit, adding to the complexity. Increased transparency, although having some benefits, may led to potential equal pay issues, Charles Cotton from CIPD warns. Stay informed with News directory 3 for this and other crucial information. Discover what’s next as this story develops.
Business Groups Cool on UK Pay Transparency Plans
Updated June 18, 2025
Proposed government measures to increase pay transparency are facing pushback from business groups in the United Kingdom, who fear the changes could negatively affect hiring and compensation practices.
Alex Hall-Chen, principal policy adviser for employment at the Institute of Directors, said some measures “would only serve to complicate the recruitment processes” and hinder firms from fairly rewarding performance and experience. The Federation of Small Businesses also voiced concerns about the impact on smaller companies.
Tina McKenzie, policy chair of the Federation of Small Businesses, said, “There’s a world of difference between a big business and a small one.” She added that it would be excessive for the government to impose detailed regulatory rules on small employers who simply don’t have HR departments.
The government’s consultation document suggests that a new Equal Pay Regulatory and Enforcement Unit could police the new rules, with powers to issue fines and modify employee contracts.
Hall-Chen said that when taken together with the recent NICs increase, the measures contained in the Employment Rights Bill, and above-inflation hikes to the National Living Wage, the current message that employers are getting is that hiring staff is becoming more expensive, risky and complex.
Other groups acknowledged the potential benefits of increased transparency but cautioned that companies must prepare for potential equal pay issues.
Charles Cotton, policy and reward adviser at the CIPD, said, “Transparency around pay structures and criteria for progression can definitely help employees understand why they’re paid the salary they’re on and what they need to do to earn more.”
cotton added, “However, employers might face potential equal pay issues if it emerges an employee is being paid a higher salary than an employee of a different sex who’s doing the same job or a job of equal value.”
A government spokeswoman said the government is pro-business and many businesses already go well beyond the requirements of the law in order to support pay equality.
The spokeswoman added, “We are seeking to build the evidence base before deciding whether any changes in relation to pay transparency are necessary.” She said that by collecting evidence on how best to tackle pay disparities, the government will be able to make sure that it maximises the benefits to both workers and employers.