There’s one topic that people love to talk about anonymously on Blind but it’s a subject generally considered taboo during water cooler chats at the office. That topic is compensation. Many workers want to avoid the awkward face-to-face conversations of comparing salaries. Then there are others who may feel pressured (or may be ordered) by their employers to keep their salary a secret. What many may not know is that companies cannot forbid or punish employees for discussing compensation.
Under the National Labor Relations Act (NLRA) of 1935, most employees can discuss their salaries and employers are prohibited from imposing pay secrecy policies, whether written or implied. This is guaranteed even if you sign a nondisclosure agreement. The 83-year-old act is a foundational statute of U.S. labor law yet it’s often misunderstood and many don’t even know it exists.
This is one reason why on April 8, 2014, former President Barack Obama signed Executive Order 13665, which prohibits federal contractors from retaliating against employees who inquire about, discuss, or disclose compensation information. The order reinforces and creates visibility for existing labor laws. The order was also signed in an effort to create pay transparency and help close the gender wage gap. According to Obama, pay secrecy fosters discrimination and shouldn’t be tolerated.
California Governor Jerry Brown believes the same. In 2015, he signed the California Equal Pay Act, a law that expands protection against workplace discrimination and addresses the pay disparity between genders. Similar to Executive Order 13665, this act guarantees employees the right to discuss their own wages or the wages of others (unless you manage payroll). The act also prohibits employers from retaliating against employees who discuss their salaries, as well as employees who encourage others to exercise the same right.
According to a 2011 survey from the Institute of Women’s Policy Research, about half of workers report that discussions about wages and salary is either discouraged or prohibited, and may even lead to punishment by their employer. From July 9 through July 15, we conducted a similar survey and posed the following statement to our users:
At my current workplace, I have been discouraged by HR/management from discussing my compensation with other employees.
A total of 8,862 people participated and the majority – 59.98 percent – replied that current employers discourage them from discussing salary information with co-workers.
When looking at a list of individual company results, we discovered the following: Booking.com finishes with the highest percentage of employees who answered “True” with 71.29 percent. Immediately following are Cisco with 67.42 percent and Microsoft with 65.09 percent. The companies with the highest percentage of employees who answered “False” are Facebook with 83.02 percent, Salesforce with 60.53 percent, and Lyft with 58.41 percent.
One commonality between many of the lowest ranking companies for pay secrecy: The employees are young. According to a survey conducted by The Cashelorette, “63% of millennials ages 18-36 have shared their salaries with an immediate family member, 48% have shared with friends and 30% have shared with co-workers. Only 41% of baby boomers ages 53-71 have shared their salaries with an immediate family member, 21% have shared with a friend, and 8% have shared with a coworker.” Millennials are killing pay secrecy, and this may be one explanation why only 16.98 percent of Facebook employees claimed that they could not discuss salary information with other employees.
If you work at one of the companies that ranks high on our list for pay secrecy, or if you’re employed elsewhere where discussions about compensation are discouraged, look out for our next blog post to learn what you can do to protect your rights.