4 new laws that could transform the pay landscape

South Africa’s corporate remuneration landscape is undergoing profound change, says Lindiwe Sebesho, master reward specialist and executive committee member at the South African Reward Association (SARA).

She says a series of regulatory reforms and a landmark Constitutional Court ruling are pushing pay practices into the spotlight, demanding greater transparency, fairness, and strategic alignment.

According to Sebesho, remuneration is no longer confined to the human resources department; it is becoming a boardroom priority.“Reward professionals are now key contributors to business success and reputation in an evolving regulatory landscape," she says.

Amended Companies Act

The Companies Amendment Act 16 of 2024 says Sebesho introduces binding shareholder votes on remuneration policies and reports, as well as mandatory disclosure of executive pay and vertical pay ratios.

She says for the first time, companies with audited financials will be required to publish, by name, the total remuneration package of each director and prescribed officer. Section 30A compels public and state-owned companies to submit their remuneration policy for shareholder approval every three years, with any interim changes also requiring approval.

According to Sebesho, failure to comply renders the policy legally ineffective, exposing directors to fiduciary breaches, personal liability, and reputational damage. Section 30B goes further, requiring an annual remuneration report to be presented at the AGM.

She says this must include a background statement, the remuneration policy, and an implementation report disclosing pay ratios between the highest- and lowest-paid employees, as well as the gap between the top 5% and bottom 5% of employees. Importantly, these disclosures must cover all employees as defined by the Labour Relations Act, including temporary and seasonal staff.

Sebesho warns that this inclusion could distort reported outcomes unless carefully contextualised: “Since these groups typically receive lower compensation, their inclusion may lead to misinterpretation unless adequately clarified.”

She says the consequences of shareholder rejection are particularly severe for Remuneration Committee members. After a failed vote, non-executive directors serving on the committee must stand for re-election, and repeated failures can disqualify them from serving for two years.

Fair Pay Bill

Sebesho says the proposed Fair Pay Bill, still making its way through Parliament, promises to disrupt recruitment and remuneration practices. It bans employers from requesting candidates’ salary history and requires pay ranges to be disclosed in all job postings.

Sebesho believes this will have a transformative effect: “The Fair Pay Bill will have a much bigger impact from a horizontal pay fairness perspective than the vertical pay gap disclosures mandated in the amended Companies Act, as it will empower people to negotiate salaries more effectively and ensure that pay practices are fairer across similar roles.”

By breaking cycles of historic pay inequality and empowering candidates, the Bill aims to create a more equitable labour market, she says.

Employment Equity Act Amendments

Sebesho says the amended Employment Equity Act (EEA) introduces mandatory sectoral equity targets for designated employers, requiring strict adherence to fair pay practices free from discrimination based on race, gender, disability, or other protected characteristics. Employers must conduct regular reviews of remuneration structures, perform pay audits to uncover disparities, and establish transparent reporting mechanisms to monitor progress.

According to Sebesho, compliance certificates demonstrating adherence to equity targets are now a prerequisite for eligibility to secure state contracts, underscoring the importance of robust employment equity plans. The amendments also expand the definition of disability and update psychological testing protocols, reinforcing inclusive HR practices. Non-compliance exposes organisations to significant financial penalties and reputational risk while increasing scrutiny of diversity and equity metrics.

Sebesho stresses the importance of proactive action: “Employers must align remuneration structures with sectoral equity targets and document progress meticulously".

Parental Leave Ruling

On October 3, 2025, the Constitutional Court delivered a landmark ruling declaring existing parental leave regulations unconstitutional. According to Sebesho, the Court struck down the provision limiting four months’ maternity leave exclusively to birth mothers, ushering in a new era of universal parental leave.

She says parents are now entitled to a combined period of four months and ten days, which can be flexibly divided between them according to their circumstances. Crucially, parents do not need to work for the same employer to benefit from this arrangement. This ruling requires employers to update leave policies, HR systems, and payroll processes to accommodate shared parental leave. Transparent monitoring and reporting will be essential to ensure fair implementation.

Beyond Compliance

Sebesho says these changes signal a new era of accountability and fairness in corporate remuneration. For organisations, compliance is only the starting point.

She says Reward professionals must redesign HR frameworks to reflect emerging legislative requirements, train managers to eliminate bias, and communicate openly with employees about pay structures and policies.

Sebesho emphasises the need for forward-thinking strategies: “Sustainable reward strategies should proactively align with the objectives of current and proposed legislation, advancing social equity and ensuring fair pay for all," she says.

By embracing these measures now, organisations can not only ensure compliance but also position themselves as leaders in building equitable, attractive, and future-ready workplaces, Sebesho says.

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