ASHEVILLE, N.C. — Under federal law, keeping employees from discussing pay with coworkers is an unfair labor practice. Yet workers, advocates, and labor experts say such “pay gag” infractions are widespread, with awareness of the law at a minimum.
Whether it’s a formal company policy or off-the-cuff words from a manager, a strict prohibition or a gentler ask, any communication that might reasonably stifle workers from sharing their salaries is, in the vast majority of situations, a violation of the National Labor Relations Act.
“It is not isolated to specific industries or even white-collar, blue-collar,” said Jeff Hirsch of the University of North Carolina School of Law. “One of the reasons it’s so prevalent despite the fact that it’s clearly illegal is that most people have no clue.”
Despite the law, many companies continue to maintain pay secrecy policies. A 2021 nationwide study by the Washington-based Institute for Women’s Policy Research found close to 50% of full-time employees reported having been dissuaded or prohibited from discussing pay at work.
The report found pay secrecy policies disproportionately impact women and are more common in areas like the American South where unionization is low.
But while wage sharing remains taboo to many, it may be gaining steam. Studies show younger workers tend to be more open about their pay, and since the dearth of staff has pushed starting salaries higher — service staff say they’ve grown more curious to know what newly hired coworkers are earning.
These dynamics may set up more clashes between workers and management over the sharing of wages. Legally employees can, but the law means little if it’s a right they don’t realize they possess.
Clear law, weak punishment
The National Labor Relation Act of 1935 is the backbone of American labor law. In court, it has been interpreted to provide workers the right to discuss wages “for the purpose of collective bargaining or other mutual aid or protection.”
Any employee told not to discuss their pay can file unfair labor practice charges with the National Labor Relations Board. Supervisors don't have to be forceful or absolute in their messaging to warrant a charge; even politely asking a worker not to say how much they make can be considered a violation.
The NLRB doesn't track how many unfair labor practice charges it receives that are related to wage discussions, but department spokesperson Kayla Blado said it's "not uncommon" to discover workers being directed to keep silent about their pay.
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Anyone fired or demoted for sharing wages is entitled to reinstatement or backpay, but otherwise, the NLRB can’t levy fines on violating companies. Instead, companies must begin permitting open wage discussions and post a notice in the workplace informing employees of their right to talk compensation.
Some say these consequences do little to deter employers from maintaining pay secrecy policies.
“The penalties for violating this law are embarrassingly small,” said Jake Rosenfeld, a sociology professor at Washington University in St. Louis and coauthor of the Institute for Women’s Policy Research report on pay secrecy laws.
Another factor leading to the sustainability of labor law-defying workplace policies, Rosenfeld pointed out, is the fact many workers aren’t inclined to discuss their wages with colleagues in the first place.
Tilting scales toward labor
Labor advocates believe knowing what others earn helps workers spot inequities that might motivate them to unionize.
However, some see a connection between low unionization and managers' policies.
"Employers have since the dawn of time discouraged employees from discussing (wages) because it’s the first step to organizing,” said Ana Pardo, co-director of the Workers' Rights Project at the progressive-leaning North Carolina Justice Center. “It’s kind of like Chapter 1 of the bad employer handbook.”
But not every supervisor who’d prefer workers keep mum about money has union-busting on their mind says Josh Armbruster, a former restaurant supervisor in Asheville, North Carolina.
Facing the city’s high cost of living, many local service industry staff understandably have money on their minds. But when heading a local kitchen, Armbruster never wanted paycheck differences to stir hard feelings, especially when he felt some of those differences were tied to variances in work performance.
“I never specifically told anybody not to (share their wages), but before, I would tell them my philosophy was to not talk about money because it’s the easiest way to get people pissed off,” he said.
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His philosophy shifted, however, once the pandemic hit. Seeing waiters, chefs, and line staff called back to work while case numbers were still rising, Armbruster felt service staff needed more power. Now a chef in another area restaurant, he believes pay transparency can tilt the scales, if slightly, in labor’s favor.
The higher salaries currently being offered to attract much-needed labor is, to Armbruster, all the more reason for workers to share their hourly rates, to learn what’s fair market value and demand it for themselves. But elevated starting wages may also be all the more reason for some employers to try to keep wages quiet — to keep the longer-term staff from realizing their new coworkers are taking home more.
“All of a sudden now you're hiring somebody on at $18 an hour, which has become standard, but what happens to people that were hired on a year ago who making $15?” Armbruster said. “That can create conflict, and so that's probably a rising situation.”
'Think of themselves as free agents'
Of course, many workers don’t withhold their salaries out of respect for their supervisors’ wishes but because it can be deeply awkward.
“We have a culture that discourages it,” Pardo said. “People don’t want to talk about money. It’s like talking about religion and politics. It’s uncomfortable.”
As a result, many may be unaware of what the person in the other cubicle or on the other end of the Zoom call earns.
While employer review websites like Glassdoor offer a window into company pay, UNC’s Hirsch pointed out this data is often incomplete and certainly not uploaded for all companies.
In recent years, states have become more active on wage transparency. Twenty-one states now have laws banning employers from maintaining pay secrecy policies.
This year, Colorado began requiring employers publish salary ranges for open positions while California became the first state to make employers provide pay data by race, gender, and job category.
And as new generations enter the workforce, cultural mores around pay transparency appear to be shifting.
According to the Institute for Women’s Policy Research report, millennials are almost twice more likely than baby boomers to discuss their salaries with coworkers. The report found more than half of millennials — people age 40 and younger — openly discuss pay.
“Younger workers find themselves in an increasingly kind of precarious economy, an economy where the operating rules have changed dramatically from their parents," Rosenfeld said. "The companies in which their employees often show them little loyalty and so they have to think of themselves as free agents."
These "free agents," may increasingly bump up against employers' written and unwritten desires to keep pay a mystery. And when this happens, the workers have options.
Follow Brian Gordon on Twitter: @briansamuel92.
This article originally appeared on Asheville Citizen Times: Office policy: Is it illegal to discuss your salary with coworkers?