Are you Allowed to Discuss Salary Amongst Your Co-Workers?
To properly understand your rights as an employee when it comes to discussing salary, you first must understand the law as it applies in the workplace. There are both federal and state laws regarding the legality of discussing salary with coworkers. Federal employees are protected by the National Labor Relations Act (NLRA), a law passed in 1935 to protect the interests of private-sector employees’ rights to organize and "engage in, or refrain from, concerted activities." Section 7 of the NLRA guarantees everyone the right to engage in concerted activity to benefit the work place. As defined by the National Labor Relations Board, Section 7 of the NLRA says that every employee has the right "to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection." In order for any discussion to be considered "concerted," two or more employees must be involved . Although the legislation does not explicitly mention discussing pay and benefits, such conversation falls under the clause of "other mutual aid and protection."
Because Section 7 says that employees can engage in collective bargaining or other mutual aid or protection, such topics include employee rights and responsibilities. Since one of the reasons for discussing compensation with coworkers is to determine if the amount of pay is fair, the topic falls under the category of "other mutual aid or protection." The complication arises when employers retaliate against employees for discussing salary, which is when the NLRA is really handy. Section 8 of the NLRA protects employees from punishment when discussing wages among workforce members, and lists certain punishable employer behaviors. Under Section 8, an employer cannot:
Discussions regarding salary can help create a fair workplace. Understanding your rights under the NLRA can ensure that such discussions are not punished.
The Benefits of Talking About Salary with Your Colleagues
Having open conversations about your pay with coworkers can help create a more equal playing field in the workplace. By talking about salary, you can gain insight into whether or not you are being treated fairly and equally. It also helps your employer identify any gender or racial disparities in pay. While discrimination is illegal, it is not unheard of for employers to purposely underpay members of certain groups. Discussions about pay will help expose these inequalities and allow them to be adjusted.
The benefits of discussing pay are not just for the employee. Equally benefiting is the employer, who can use the information to not only be in compliance, but to avoid potential litigation. After it is established that the law protects open discussions of employee pay, employers in the US can benefit from advocating for this right. For instance, as the EPIC case shows, which involved a large government contractor, the pay gap between male employees and female employees with the same job title was as high as 26%. The risk of litigation over disparate pay is endless, and costly for even the most secure businesses.
Salary Conversation Myths
The first misconception is that it is illegal to talk about your salary with co-workers. Federal law does not expressly prohibit or protect employee salary disclosure. In fact, you are protected by law from employer retaliation for disclosing your wages.
Another common myth is that your employer has a right to control your salary discussions. Employers do not have a general right to monitor or restrict employee speech, unless there is a justifiable reason. (e.g. Trade secrets disclosure in violation of a non-disclosure agreement or some other contract restrictive covenant).
In the same vein, many people believe that without a contract, they have no say in the matter, or that they are bound by their employer’s policies. An employer cannot have a policy restricting you from discussing your salary with other employees and enforce that policy without risking a retaliation or unfair treatment claim.
It is true that you have no right to discuss matters you have agreed to keep secret, like a nondisclosure agreement or trade secret information. But if you are discussing your own compensation, that is generally not a trade secret or confidential information in a manner that would allow an employer to enforce a policy against disclosure. That said, there’s a caveat to this, and if you are covered by such an agreement, you should check your contract to be sure.
Finally, employers can and do fire employees for salary disclosure – they may use poor performance or other pretextual reasons to terminate the employee. However, an employer’s attempts at retaliation are illegal. So while it is legal to have discussions about your salary, be prepared for the potential backlash and retaliation and know your rights.
What Your Employer Cannot Do and Your Rights
Employers face certain limitations when it comes to preventing employees from discussing wages with their coworkers. In fact, employers are generally prohibited from establishing rules or policies that prevent employees from discussing their wages or other terms and conditions of employment with others. Such rules practically extend to talking about wages to co-employees, former employees, or potential future employees.
However, employers should be aware of the ability to prevent employees from discussing wages with unauthorized personnel. That is, an employer may avoid liability under wage and hour laws by stating in its employee handbook that employees have a duty not to discuss any proprietary or confidential information, including wage information, to outside parties including media representatives or other company competitors. Despite this ability, employers may not prevent employees from discussing their wages with labor organizations or union representatives.
Under current state and federal labor laws, retaliation against employees that in some way discuss their wages with co-employees or union representatives could result in liability for back pay, job reinstatement, or even front pay. Recent federal interpretations limit the application of the National Labor Relations Act to employees of a unionized workplace.
Tips for Addressing Salary Discussions with Co-Workers
- Keep it casual. Your coworker may not be comfortable discussing salary details, which is completely understandable. Approach the discussion topic as casually as possible, letting them know it’s not a fixed agenda item, and if they’d rather not discuss their salary with you, that’s fair.
- Make an appointment. One surefire way to make a coworker uncomfortable is to bring up salary when they’re busy or have deadlines. Schedule a lunch, happy hour, or coffee appointment in advance to set the stage for the discussion. The more comfortable both you and your coworker are, the more effective the conversation will be.
- Make an agreement. A safe, simple way to tackle the salary topic is to come to an agreement with your coworker in advance of the conversation that you won’t share the details of each others’ salaries with anyone else, including other coworkers.
4 . Avoid comparisons. When introducing the topic of salary, rather than sharing exactly how much you earn versus how much they earn, try to speak about your pay in general terms and focus on if you think you’re fairly compensated for the work you’re doing. Comparing your salary to a coworker’s is unproductive, and could be hurtful to your coworker.
5. Be honest. If you feel you are being underpaid for the work you are doing, let your coworker know, and ask if she or he feels the same. Ask if they’ve heard from other coworkers if they feel they’re underpaid. Honest discussion is the best way to get to a resolution.
6. Don’t share the numbers. Again, keep salary numbers out of the discussion both for you and your coworker, especially any information they share with you. Unless you have a signed agreement like a non-disclosure contract, don’t share your salary details with anyone.
What To Do When There’s Salary Discrimination
Employers should be aware about the various federal and state protections in place that safeguard employees from being discriminated against based on a variety of factors, including but not limited to race, age and sex. However, many employers could be completely unaware if they are being discriminatory towards employees in another realm – a realm that has been garnering more and more attention as of late and has recently become a very hot topic nationally: salary discrimination.
Salary discrimination is simply treating two employees differently based on their salary or hourly wage. Unfortunately, this is certainly not as uncommon as it should be. Examples of this type of discrimination may include an employer paying one employee more or less than another employee for performing the same or similar job, or offering different starting salaries to a group of applicants despite them all being at the same skill level. On a larger scale, salary discrimination can also occur if an employer has a difference between the average annual salary for employees of one gender as opposed to employees of another gender.
Some of the signs of potential employee salary discrimination include employees downloading a salary analyzer app to compare their salaries to other employees, odd comments that are made to an employee about their salary (or questions they receive about how much they are being paid) or an unease about disclosing their salary to a colleague. All the above may very well be reasonable actions in the eyes of an employee or even some employers, but they are certainly classic warnings signs to an employer that something may be amiss.
If an employee does suspect that they are the victim of salary discrimination, there are certain steps that they can take in seeking redress. The first step would be to contact the federal Equal Employment Opportunity Commission (EEOC), or corresponding state agency to file a complaint. In fact, the law requires an employee to exhaust all administrative remedies with the EEOC before filing a salary discrimination lawsuit.
This process involves an employee filing a charge with the EEOC along with a fee. Within 180 days of the charge being filed, the EEOC will either issue a right-to-sue letter or pursue the claim on behalf of the employee. If successful, the employee could receive back-pay, interest on the back-pay, back-pay at a future rate, front-pay, compensatory and punitive damages, and attorney’s fees. There is a cap on the damages that an employee could potentially receive which is based on the number of employees an employer has.
Another option an employee may want to consider is to file a lawsuit directly in California Superior Court under the California Equal Pay Act (Cal. Labor Code § 1197.5). This is a state act aimed at addressing salary discrimination based on race or gender. Rest assured, vicarious liability is at play. In other words, not only could your company be held liable, but so could anyone who was involved in making the decision that led to the employee’s injury.
All in all, the best way to stay away from a situation like this is simply to pay people what they are worth without regard to anything other than performance. And as always, employers should make sure to have a fully functioning set of checks and balances in place when it comes to hiring, training, discipline, termination, etc.
Legal Assistance and Resources
Support and Resources for Legal Aid and Advocacy Organizations
If you experience retaliation or discipline as a result of discussing your pay with co-workers, there are legal aid resources that may be able to help you. A legal aid lawyer can assess whether the employer action is illegal and whether you could pursue legal action against your employer. Further, there are advocacy groups in your area. For example, in New York City , the Stonewall Community Development Corporation provides free legal assistance on a variety of employment issues to individuals who identify as members of the lesbian/gay/bisexual/transgender community. And although there are no laws in Tennessee that prohibit an employer from disciplining an employee for discussing his or her salary with other employees, advocacy organizations, civic groups, or even close friends may be able to provide guidance on the issue and help you decide how to move forward.