Can I prohibit employees from discussing their salaries?
Many employers cringe at the thought of employees discussing their salaries. Conversations about salaries can cause conflict among coworkers and anger towards management. In an effort to avert this outcome, some employers implement policies prohibiting employees from having discussions about their compensation and benefits. Before doing so, employers should know that any such policy may get them in hot water under federal and state laws.
The federal National Labor Relations Act (NLRA) gives both union and nonunion workers the right to discuss terms and conditions of employment, including their salary and benefits. These discussions constitute “protected concerted activity” under Section 7 of the NLRA and are protected whether employees are talking to each other in person or through social media. In addition, some states have implemented “pay secrecy” laws that protect employees who discuss their salary with their co-workers. For example, in New Jersey, it is illegal for an employer to retaliate against any employee for discussing with any other employee his or her “rate of compensation, including benefits.”
The problem remains, however, that discussions among employees about pay and benefits can evoke feelings of unfairness and jealousy. This is particularly true when workers do not understand that there may be legitimate business reasons for salary differences, including worker disparities in education, experience and training. This in turn can have a negative effect on employee morale and company culture.
The best way to combat these problems is to foster a positive working relationship with your employees. Ways to do that may include:
- While this may seem like a no brainer, employers should pay employees fairly, with similarly situated employees earning similar salaries, within established salary ranges in the marketplace. To ensure this, frequently review and evaluate employee compensation, and adjust as necessary to ensure fair and competitive pay.
- Be as transparent as possible when explaining your company’s compensation program, including how pay decisions are made. Help employees understand salary ranges and job potential, and inform them how acquiring additional skills, education and/or certifications may positively affect their career paths within your company. This type of communication can help remove the mystery behind wage decisions and improve employee morale.
- Promote an open-door policy, where employees feel comfortable approaching management and/or Human Resources with questions or concerns about topics such as salaries, benefits and working conditions. Consider implementing a complaint resolution procedure that allows employees to raise these types of issues.
- Train managers and human resources professionals regarding policies and practices around pay transparency so that they are aware of the legal issues and know how to respond to employees’ inquiries.
When in doubt about implementing or enforcing policies regarding pay practices, employers should consult with experienced human resources professionals and/or labor and employment counsel. For MEA members, the Hotline and a Member Legal Services attorney are available to provide this assistance.
About the Author
Amy McAndrew is MEA’s Director of Member Legal Services and has over twenty years of experience as a labor and employment attorney.