Can Employees Discuss Their Salaries at Work?

Employees discussing salary at work can open a Pandora’s box of morale issues. It can cause tension between employees, resentment toward management, and lead to a hostile work environment. To prevent this, some companies implement policies that prohibit employees from discussing their pay with co-workers. Before crafting a policy to curb information sharing, it’s important to understand the legal implication of such a an action.

Federal Position

Under Section 7 of the National Labor Relations Act (NLRA), employees of private-sector companies have the right to discuss the terms of their employment, including salary and benefits. Section 8 of the NLRA prohibits employers from violating employees’ rights under Section 7,  thereby making company policies that forbid salary discussions illegal.

The NLRA also prohibits overly broad policies that could be reasonably interpreted as barring employees from discussing their salary, or other terms of their employment.

As for coverage, the NLRA extends to union and nonunion workers. However, there are some exclusions, including public-sector employees, agricultural and domestic workers, airline employees, and independent contractors.

Certain limitations may affect coverage, such as the manner in which employees receive the salary information. According to the Texas Workforce Commission, employees are covered under the NLRA if:

• They are discussing their own salary information.
• They are discussing others’ salary information that they “obtained through ordinary conversations with others.” They might not be covered if the salary information they are discussing was accessed through unauthorized means.

State Position

Some states have implemented “pay secrecy” laws, which protect employees who discuss their salary with their co-workers.

For example, in California, employers cannot “require, as a condition of employment, that an employee refrain from disclosing the amount of his or her wages.” Further, they cannot require that employees sign any document that aims to deny them their right to discuss their pay at work, nor can employers formally discipline, terminate, or discriminate against employees for disclosing their wages.

Employer Recourses

Instead trying to prohibit salary discussions, consider the following alternatives:

• Pay employees fairly, within the established salary ranges.
• Offer competitive salaries.
• Advise employees that it’s fine to have discussions at work, but that it’s best to exercise moderation when having these conversations. When giving this advice, do not specifically point out salary or benefits as discussion topics; instead, speak in general terms.
• Avoid overly broad policies that could be construed as prohibiting salary discussions.
• Be as transparent as possible when explaining your compensation program, including how salaries are determined.
• Promote an open-door policy, where employees can feel comfortable approaching their managers about sensitive topics such as pay and benefits.
• Frequently evaluate your compensation program, and adjust it as necessary to ensure fair and competitive pay.

For more information on regulatory compliance, contact:

Human Resources

Email: hr@innovemp.com

Ph. 858-999-9531 Ext. 1055