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Jul 07, 2016

Let's Talk About Wages

By: Allison Mann

Should co-workers discuss or compare their salary information?

I was recently listening to a radio show, where the host presented this same question in the context of a recent news story about a teenage girl who just accepted a job at a pizza parlor was fired for asking for a raise when she discovered that her male co-worker made twenty-five cents more per hour. Her male co-worker was also fired. The explanation given to both teens was that it was against company policy to allow employees to discuss wages.

Now, the radio host framed the question not as an equal gender pay question (which has gotten nationwide negative attention) but instead asked whether the employees had a right to discuss salary information. He wanted to know what his listening public thought of the situation. Quite a few people called in and were very fired up; however, what they were fired up about surprised me. The overwhelming majority of the callers could not believe that these teens thought it was ok to discuss salary information at all. One caller, who self-identified as a restaurant manager, said that if he ever found out his employees were comparing pay they would be fired immediately.

Other callers took a slightly more sympathetic approach and said that they thought it was fine for an employee to negotiate their own salary, but that it was still not right to freely discuss salary information with co-workers. Not one caller stood up for the two teens who were fired (though I did not listen to the entire program).

It similarly surprised me that no one asked the question of whether or not it was legal for co-workers to discuss salary information, or more aptly, whether an employer can prohibit such discussions from taking place. That is what we are here to examine today.

The Law:

The National Labor Relations Board has rather strong opinions about what employee actions an employer can regulate. It is strongly on the side of allowing employees to engage in pay discussion. It finds support for this stance in Section 7 of the National Labor Relations Act. Employers cannot limit an employee’s activities for the purposes of “collective bargaining or other mutual aid and protection.” The NLRB makes it clear that it considers discussing salary such a right.

Similarly, President Obama issued an executive order on April 8, 2014 prohibiting federal contractors from retaliating against employees that share salary information. This covered any gap in the NLRA regulations for federal employers.

Thus, it is not legal to prohibit employees from discussing their wages with other employees.

The Takeaway:

You cannot punish an employee for discussing pay with another employee. Don’t do it.

Proactive employers should consider adopting a policy that expressly states the company will not discriminate on this basis. The following language may be considered:

[Company X] will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.

For more specific guidance, it is recommended that businesses consult competent legal counsel.

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Reprinted with permission from an article submitted for publication in the July, 2016 Southwest Area Human Resource Association newsletter.