When Employees Discuss Pay by Paula Mathew
In 2014, New Hampshire passed SB 207, the Paycheck Fairness Act, that prohibits conditioning employment on a promise to refrain from disclosing wages or to waive the right to disclose wages, salary, or paid benefits, and prohibits retaliation for disclosure. In fact, even if you have employees sign a nondisclosure agreement, they still have the right to discuss pay.
Companies covered by the National Labor Relations Board have always had to allow employees the right to discuss salaries. An executive order by President Obama in 2014 extended that ruling to all federal contractors: “The contractor 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.” Discussion of wages can be in person or online; the rules are the same.
One of the motivations for these laws and the executive order is to enable women and minorities to find out if their salaries for equal work are lower than those of men or non-minorities. As part of the same effort, a recent Massachusetts law prohibits employers from asking employees about their salary history until after a job offer that includes compensation. The intent of the law is to prevent companies from extending an artificially lower salary to groups, such as women, who traditionally are paid less, by basing the salary offer on an artificially lower previous salary.
In general, society is moving toward greater transparency in salaries and more protection for employees. Even if your company does not have any federal contracts, is not covered by the NLRB, and does not operate in Massachusetts or New Hampshire, you should be aware of the trend and you should keep ahead of it in your policies. You have little to gain and potentially a lot to lose by insisting on pay secrecy.
For help in framing your policies about pay, please contact HR Compliance 101 today.