Is It Illegal to Discuss Wages at Work? What Employers and Employees Should Know

Employees have the legal right to discuss wages at work, even if company policies say otherwise. Employers can support fair pay and open communication to help maintain trust and reduce workplace conflicts.

By Douglas Wade, Attorney

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Table of Contents

1. Introduction

2. What employers cannot do

3. Employers’ options

4. Have a plan for compensation

5. Advice for recruiting managers

6. How your human resources team may assist

7. In summary

Introduction

Is it appropriate to talk about pay at work? Yes, even if it is prohibited by company policy.

In fact, since such policies typically contradict federal labor law, having one against it could land you in serious trouble with the NLRB (National Labor Relations Board).

Even if you are a non-union employer, the National Labor Relations Act safeguards workers’ rights to speak about terms of employment, such as compensation and safety. Employees who “take measures for their mutual help or protection concerning terms and circumstances of employment” are engaging in what the NLRB refers to as “protected concerted action.”

The NLRB, for instance, filed an action against a St. Louis diaper supply firm that dismissed an employee for discussing pay with another worker. The NLRB determined that the employer’s handbook provision prohibiting wage discussions was illegal. The company, therefore, changed its handbook and offered reinstatement and payback to the employee.

The given case illustrates such a common misconception that employers can forbid their workers from discussing their salaries. If you are wondering: “Is it illegal to discuss wages at work?” know that trying to stop those conversations can actually be illegal.

Such discussions may influence the whole organization. You can better protect yourself and your business the more you understand what you are permitted to do.

What employers cannot do

Employees cannot be stopped from discussing their wages or other stuff about their jobs with their fellow employees, either verbally or in writing.

As staff members talk with each other either face-to-face or on social media, discussing compensation in the office is also protected.

Is it illegal to discuss wages at work? No, and any attempt to ban it likely violates federal labor laws.

Employers’ options

The discussions may lead to envy and unfairness in fellow colleagues who are likely to lack an understanding of various factors that lead to pay differences, including training, education, and experience. Salary conversations are always prone to suspicion and distrust, among other negative emotions, which mostly affect employees’ morale. The best way to avert those problems is to create an outstanding working relationship with your employees.

Consider introducing tactics such as:

If you want to have reasonable salaries in the market, review your own books and start paying people fairly. “Is it illegal to discuss wages at work?” No. In fact, being open about pay could be your company’s biggest asset in retaining talent.

Offer a free communication working environment where employees are not afraid to question or express their concerns regarding their compensation or working environment to the management or the HR staff.
Assist staff members in understanding their pay ranges and career prospects, and let them know how acquiring new abilities, certifications, or training may impact their advancement within your organization.
Give management the tools and training they need to understand labor laws and how to handle inquiries and requests from staff members.
Create a complaint resolution process for your business that gives workers a voice.
Instead of worrying about “Is it illegal to discuss wages at work?”, track employee engagement, salary perceptions, and the overall atmosphere of your business by conducting internal surveys.

Have a plan for compensation

Your business should describe the process by which pay choices are determined in order to provide a foundation for employee compensation. Maintaining pay in accordance with job descriptions, industry norms, and corporate policies can be facilitated by implementing a system of checks and balances.

Employees may perceive it as unfair if you find that some employees have pay rates that are out of line with the norm or the market. Positions can occasionally be justified as having reasonable pay rates and substantial strategic value. Nonetheless, the compensation analysis should include documentation of these discrepancies. If your pay selections are based on objective standards, it will be simpler to refute an allegation of unfair compensation.

A third-party vendor who conducts pay surveys and analyzes information based on job descriptions, educational background, and geography can be a good choice for you. It will provide you with a starting point for figuring out how much to pay your staff by providing you with comparable occupations in the industry and the pay scale. To make sure your pay is still consistent with industry norms, repeat the compensation surveys on a regular basis.

There are several factors to take into account when calculating compensation. It may be founded on a variety of factors:

Base salary
Bonuses
Merit increases
Commissions
Shifts/ Working hours
Special skill sets
Benefits

Pay equity is a popular topic that is pushing some businesses to be more open about their pay. Such practices can be seen in the form of pay ranges (possibly between minimum and maximum pay), and recommendations of pay grades in the absence of providing actual figures in reference to professions. Openness has the potential to promote employee motivation and confidence among the management and also to get rid of the uncertainties of the salary actions.

Advice for recruiting managers

Hiring managers ought to utilize and document the information once they have decided how and what to compensate staff for particular tasks. Even while you’d like to give people a say in wage decisions, you can’t make these decisions in a vacuum. An approval layer ought to exist. Document the justifications for the exemption and have someone higher up within the hierarchy review and approve it if the remuneration is departing from your policy.

In several states and towns around the nation, it is illegal to inquire about a job applicant’s past pay history. The idea is that employees should be paid according to their official compensation plan rather than their past earnings. A fairer wage structure is produced by using your company’s rates of pay as a guide.

How your human resources team may assist

Think about calling in your HR personnel when an employee raises the issue of salary. They should be prepared to probe more and learn about the true worries of the employee. There can be deeper issues than just the issue of the salary rate.

It might relate to a personal issue. For instance, a worker’s spouse is struggling and needs more money after losing their job. The topic of gender disparities could come up during an employee’s learning that others are receiving higher salaries. When human resources are involved, it shows the worker that their issues are taken seriously and that they are aware that they may require more help and support.

In summary

“Is it illegal to discuss wages at work? Not at all. Your staff members are the foundation of your business, if you are like most others. Problems can be prevented before they become more serious by having mutual trust and a sense of worth. You must be able to manage any problem that arises with the help of your management and HR personnel.

Have a quick question? We answered nearly 2000 FAQs.

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Is It Illegal to Discuss Wages at Work? What Employers and Employees Should Know

Introduction

What employers cannot do

Employers’ options

Have a plan for compensation

Advice for recruiting managers

How your human resources team may assist

In summary

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