Can Your Employer Prohibit You from Discussing Your Salary?

There is a common misconception among employees that you cannot discuss your pay with others. In fact, employees’ right to discuss their salary is protected by law. While employers may restrict workers from discussing their salary in front of customers or during work, they cannot prohibit employees from talking about pay on their own time.

In this article, we will answer the most frequently asked questions about salary discussions. We’ll also review the laws that protect salary discussions, as well as their exceptions and limitations. Let’s start by answering the most important question, “Can employers prohibit workers from discussing pay?

Employers Cannot Prohibit Employees from Discussing Pay

TX Bar Today Top 10 BadgeIn 2014, President Obama signed an Executive Order stating that Federal contractors cannot prohibit employees from discussing compensation. In the Order, Obama explains his reasoning:

“When employees are prohibited from inquiring about, disclosing, or discussing their compensation…compensation discrimination is much more difficult to discover…and more likely to persist.”

The Order goes on to stipulate that employers cannot discharge or otherwise discriminate against any employee or applicant because they have “inquired about, discussed, or disclosed compensation.”

Even prior to Obama’s 2014 Executive Order, Section 7 of the National Labor Relations Act (NLRA) prohibited employers from limiting employees’ activities related to “collective bargaining or other mutual aid or protection.” The National Labor Relations Board (NLRB), the body charged with enforcing the NLRA, has interpreted Section 7 to mean that employees have a right to discuss salary and wages. See, NLRB v. Brookshire Grocery Co., 919 F.2d 359 (5th Circuit, 1990). The NLRA applies to virtually all private-sector employers, only exempting federal, state, and local governments, employers subject to the Railway Labor Act, and those who only employ agricultural workers.

In a nutshell, the NLRA protects most employees’ right to discuss their salary, and President Obama’s executive order applied that same right to federal employees and contractors.

However, there are a few important exceptions to the rule that you should know about. If you have access to company wage and payroll information, you cannot share employee pay information with others unless your employer or an investigative agency has directed you to share that information. Basically, you do not have a right to reveal someone else’s salary with others.

What Can Employers Do When Employees Discuss Salary?

Employers cannot prohibit or discipline employees for talking about their salaries on their own time, but they may have an interest in reducing the distrust or jealousy that can arise from salary discussions. Transparency is great (not just in the workplace), but it can lead to some problems if a particular company does not have an easily understood compensation strategy. To prevent discrimination, inequity, and disputes over pay, it helps for employers to have a system of checks and balances when it comes to salary.

Rather than punish employees for discussing wages, employers should strive to have well-written compensation policies that inform all employees how they decide salary. They may also implement a complaint resolution procedure that gives employees a chance to be heard if they feel their salary is not in line with their co-workers. Ideally, employers will continually inform workers how they might increase their salary range, through additional training, certification, and merit increases. In other words, the best way for employers to discourage workers from discussing salary is to have a compensation system that everyone knows and understands.

Is Salary Confidential?

This question has a slightly more complicated answer. While employees are free to discuss their wages with one another, there must still be some degree of confidentiality.

For example, let’s say you have a co-worker, Bob. Without speaking to you, Bob goes to your company’s Human Resources Department and demands to know what you are being paid. The Human Resources office cannot discuss your salary with Bob because that is considered part of your confidential employee record. You have the right to share your salary with Bob, but others do not.

What are “Pay Secrecy” Policies and Are They Legal?

Because many workers are unaware that employers cannot restrict employees from discussing pay, some employers have tried to implement illegal policies. In fact, a 2011 survey found that half of employees say that their workplace discourages or prohibits “discussion of wage and salary information.” Pay secrecy policies, which may be written or implied, discourage or prohibit employees from talking about their pay. More often than not, pay secrecy policies are unwritten and employees just assume they are not allowed to discuss compensation. Either way, these types of policies clearly violate the NLRA.

But what about non-disclosure agreements? Non-disclosure agreements (NDAs) are confidentiality contracts that require two or more parties (such as an employee and employer) to keep specified information secret. Often, NDAs protect information like marketing and sales strategy, customer lists, and trade secrets. In general, non-disclosure agreements are lawful, but they cannot include any provisions that prohibit the discussion of pay. Salary discussions are protected and will trump any non-disclosure agreement (even if the other portions of the NDA are perfectly lawful).

We Can Help Protect Your Rights as a Worker

If your workplace has a pay secrecy policy, or you are disciplined or terminated for discussing salary with others, you may have a legal claim. If your employer is violating the NLRA or President Obama’s Executive Order regarding salary discussions, you have rights.

To find out if you have a legal claim and develop a strategy for moving forward, contact our office for a consultation. We offer free, no-obligation consultations so you can determine whether your case is worth pursuing before making any commitments.