The Case for Pay Transparency
Updated: Feb 22
Pay transparency is a powerful tool to combat pay inequity, but some argue that salary discussions should be kept out of the workplace.
Employers have long frowned upon employees discussing their salaries with each other - they can get away with paying workers less when those workers don’t discuss their salaries. However, many workers may not know that the 1935 passing of the National Labor Relations Act makes it illegal for private sector employers for prohibiting employees from discussing their wages and salaries. It's also In fact, Donna Ballman, employment lawyer (employee-side) and author of Stand Up For Yourself Without Getting Fired, suggests that "if your employer has a written policy or contract prohibiting salary discussions, you can report them to the National Labor Relations Board.
Benefits of Salary Discussions
Open and delicate discussions about salary can help employees expose their employer's unfair pay practices and discrimination if they are able to recognize a trend of certain classes of employees being paid less (e.g. gender, age, or race).
If you have legitimate concerns that you are significantly underpaid compared to your colleagues, discussing your salary with your peers can prepare you to negotiate a better salary with your employer. In addition to learning what your coworkers earn, compare the average salary of your workplace with salaries for similar positions in other companies using online tools like Salary, Indeed, or Glassdoor. Knowing the average market salaries can help you and coworkers devise a plan to convince your employer to raise staff pay across the board.
The Risk of Pay Transparency
While discussing salaries can shed more light about a company's pay practices, there are serious drawbacks to consider. Discussing salaries can sow the seeds of discontent - breeding jealousy or rebellion which can lead to increasing conflicts among coworkers and decreasing productivity.
You may also risk of being reprimanded by your employer. Despite the 1935 National Labor Relations Act, prohibiting or discouraging employees from openly discussing their salaries - systematized or implicitly built into the company's culture - is still commonplace in workplaces. Stories of people facing punishment for sharing their salaries at work are not difficult to find. However, knowing that you are legally in the right, you can easily brush it off
The Nuances of a Person's Pay
An employer's determination of an individual's pay is not a black-and-white matter. Before you decide to open up a discussion about salary at work, know that differing experience levels and skills set can make for apples-and-oranges comparison, even for people with similar job descriptions. There are numerous reasons why a colleague's salary can differ from your salary:
length of time with the company;
the average market rate salary at the time of employment;
the individual's work performance; and
If you decide to bring up the topic of pay with your coworkers, you should do so with care and only speak with the coworkers you trust, promising to keep the information to themselves. If you prefer a safer option, you can reach out to former colleagues who recently left the company. Avoid discussing your salary during work hours as this discussion is safer and better saved for laid-back settings like during lunch breaks of after work. Utilize the "win-win" approach in your discussions. Frame your discussions as a benefit for everyone, keeping the focus on the salary and not the person. You don't want to appear as if you are fishing for gossip or trying to start trouble. Your objective is determine if you (and your colleagues) are being fairly paid and treated by your employer.