Potential Effects of Salary Disclosure in the Workplace

24 Jun

Employers can't stop workers from discussing their wages with one another.

How much each worker makes has traditionally been between that employee and HR. Many HR departments have had a tight hold on their payroll management and have worked to keep discussions about salary out of the workplace. In fact, numerous employers have it set in their employee handbooks that such talk about what workers make is against the companies' rules.

However, a 2012 article that appeared on TLNT noted that any rules that restrict employees' freedom to discuss their compensation is against the National Labor Relations Act. If this isn't enough, President Barack Obama recently issued an executive order stating that employers are not allowed to retaliate when workers talk about their salaries amongst themselves. According to the order, prohibitions against speaking about compensation can allow salary discrimination in the workplace to go unchecked, because if employees aren't able to talk to one another about how much they made, it is much harder for discrimination to be discovered.

Some HR professionals may not think such discrimination happens in today's workplace, but it does. Consider this example from MoneyWatch: A new supervisor of a travel company accidently sent a spreadsheet to a 11-person department that outlined what each worker made. Even though the employees did the same work, there was a $20,000 annual discrepancy between the highest and lowest paid workers. These employees might not have known there was such a difference in compensation despite everyone doing the same job if it wasn't for this mistake.

Avoid the Fall-Out of Not Allowing Salary Disclosure
Wage transparency is becoming commonplace, and HR professionals need to understand that not allowing workers to discuss their wages can lead to negative consequences. For one, prohibiting salary disclosure has been determined by the federal government to be illegal. Employers could find themselves in violation of employment legislation by not following President Obama's order.

In addition, while an article in TLNT noted fairness can be subjective, workers who do the same work should be paid equally, and employees who aren't can become mad to the point of quitting and can even bring discrimination lawsuits against the employer. For instance, the MoneyWatch article noted the employee who wrote into the publication said the morale of his or her team has dropped considerably since they discovered the pay discrepancies, and the worker in particular was angry that he or she was a top producer but wasn't compensated for that level of performance. 

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