How Do You Stop Employees from Talking about Salary?
By Nancy Owen, PHR, Senior HR Consultant
Well, you don’t. According to the National Labor Relations Act (NLRA or the Act), employees have the right to communicate with other employees about their wages. Whether face-to-face conversations take place, or a written message is sent, they can and usually do discuss pay.
According to the law, wages are considered a vital term and condition of employment, and discussions of wages are often preliminary to organizing or other actions for mutual aid or protection. Therefore, the Act prohibits employers from taking action against employees who engage in discussions about wages.
What can employers do about it?
Certainly, when employees discuss salary at work it can be challenging for the organization. Especially when employees think they are underpaid, less valued, or they become jealous of co-workers getting higher pay.
Some things to consider:
- Make sure your wages are set up to be fair and competitive in the marketplace. According to Pew Research Center data, the top reason employees leave their job is because of poor pay.
- Educate your employees on what your company’s compensation philosophy is and what it is based on. They usually are not aware that compensation can be based on various criteria including education, experience, and training.
- Help your employees understand what their job potential looks like and how they can gain additional skills, training, or certifications and grow in your company. According to Indeed, another top reason employees leave their jobs is because of a lack of career advancement opportunities.
- Train your managers to understand your pay philosophy and how to have conversations with their employees. Make sure they understand how vital it is for motivation and transparency.
- Conduct stay interviews and surveys to monitor the temperature of engagement and overall morale.
According to iHire.com, more than 90% of employees report that if their company is transparent about decisions regarding salaries, they trust their organization not to have pay disparities regarding gender, ethnicity, or race. This could result in improved employee morale, retention, and loyalty.
What is pay equity and what is the risk to employers?
Pay equity is a method of eliminating gender and race discrimination when establishing and maintaining wages. Many workers are separated into various jobs which are historically underpaid because of their gender or race. According to the U.S. Equal Employment Opportunity Commission (EEOC), which enforces the Equal Pay Act of 1963 (EPA), the EPA requires that men and women in the same workplace be given equal pay for equal work. Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act collectively prohibit pay discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, and gender identity), national origin, age, disability, or genetic information. The EEOC takes that prohibition seriously and is actively involved in combating pay discrimination.
What to know about salary/wage range disclosure mandates
A growing number of states require employers to include the pay ranges for open positions in the job posting. ADP reports that, as of early 2023, several states had enacted legislation addressing salary range disclosures (Washington, California, Nevada, Maryland, Connecticut, Colorado, and Rhode Island). New York state has also introduced a law that will go into effect in September 2023. In addition, localities in Ohio, New York, and New Jersey have enacted similar legislation. New York City, for example, already requires employers with at least four employees or one domestic worker to post salary ranges for all internal and external job postings. This applies even if the job is only partially performed in New York City or if a remote applicant in New York City can apply.
Some states have laws mandating reactive disclosures of salary ranges. This means employers must provide the salary range only when an external applicant requests it, though some states extend the same right to internal employees, or when an applicant reaches a particular stage of the interview process.
Connecticut requires a reactive one-to-one provision for pay range, meaning the employer must provide the pay range if the applicant requests it. This applies to both internal and external applicants. On the other hand, Colorado is a proactive state, requiring employers to post salary ranges on all public job postings but not on internal postings. In addition to the base pay range, employers in Colorado are required to provide information on any additional pay types, such as bonuses or commissions.
Likewise, Washington state now requires employers with 15 or more employees to provide pay ranges for internal and external job postings. But the state has taken it one step further by requiring external postings to also include healthcare, retirement, and any other reportable benefits. The same is not required for internal postings but must be provided if an internal applicant requests.
If you are not sure of your state’s requirements, or if you are an employer with any HR concerns, please send an email to HRhelpline@eastcoastrm.com. If you have any questions about East Coast Risk Management and the services we offer, please visit our website (www.eastcoastriskmanagement.com) or call (724) 864-8745.
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