What Employers Can Do When Employees Discuss Wages

By Laura Dowling, SPHR on May 11, 2021
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when employees discuss wages

Employees do not always understand the reasons behind pay variations and can assume they are a victim of unfair treatment. Learning how much each of their co-workers earns during casual discussions can escalate the situation even more, which is something employers obviously want to avoid. However, employers must tread carefully when placing restrictions on whether employees can discuss their wages at work or outside of work.

Is It Illegal to Tell Employees Not to Discuss Pay?

According to the National Labor Relations Board, employers cannot express verbally or in writing that employees cannot discuss wages amongst themselves. A company that creates such a policy violates federal labor laws and could face sanctions and fines.

The right of employees to discuss wages falls under Section 7 of the National Labor Relations Act (NLRA) titled 29 U.S. Code § 157.Right of employees as to organization, collective bargaining, etc. Under the NLRA, wage discussion is a concerted activity related to collective bargaining, mutual aid, or other protection that employees have the right to engage in without fear of discipline or termination from their employer.

The NLRB has updated its policy in the social media age to include protection for employees who post their salary or ask co-workers about their salary on Facebook, Twitter, or other popular sites. This protection means that employers cannot fire employees for posting salary information alone.

Federal labor laws put employers in a difficult position, such as when an employee asks, “Is it illegal to discuss salary with co-workers?” and the company representative must answer no. At the same time, employers can take steps to discourage this type of behavior from occurring in the first place and damaging employee morale.

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Steps to Take When Employees Discuss Wages

Determine to Treat Employees Fairly

Sometimes employers assume they are paying employees equitably only to realize that a serious pay compression issue exists. The term pay compression refers to situations such as a new hire earning more than an employee with several years of seniority. Managers earning the same or less than people reporting to them can also occur. If the Human Resources department uncovers problems with pay compression, the next steps are to determine how it happened and adjust the salaries of those affected by it.
When a working environment has become unhealthy due to employee resentment regarding pay differences, it may be time to hire an outside party to complete a salary survey. Employers will need to approach the data with the flexibility to provide wage leeway when appropriate such as pay differences based on scheduled shift. Third-party vendors offering salary surveys typically include these factors when analyzing the data:

  • Detailed job description for each position.
  • Experience and education required for the position vs. the experience and level of education each employee has.
  • How the employer’s wages for each position compare to similar companies, with similar positions in the same geographic area of the country.

The data from the salary survey will assist employers that need to update the company’s compensation policy to ensure similar pay levels for the same position.

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Encourage Employees to Discuss Wage Concerns with Hiring Manager or HR.

Although it is illegal to tell employees not to discuss pay, businesses can steer them towards more appropriate options for addressing their concerns. For example, provide resources for new employees in the company handbook regarding what to do if they feel they are receiving an unfair wage compared to their co-workers.

The HR department or Hiring Manager is most qualified to handle these discussions but should not specifically discuss the salaries of other workers. Instead, they should explain to the employee how the company establishes pay grades and the variables that go into people in the same job earning different wages. This discussion is an excellent opportunity for HR/ Management to provide guidance to the employee regarding additional certifications or training that could increase pay as well as how to improve on-the-job skills.

Provide Managers with NLRB Training

Managers should have enough training and knowledge to answer basic questions and understand employer and employee rights, even if they end up referring the employee to HR. Providing training on the NLRB and NLRA, rules and regulations, and manuals and guides should help in this regard. Since information updates frequently, businesses should consider doing a refresher annually and/or when significant changes occur

Finally, asking employees to complete an engagement survey gives additional clues as to what may be causing the salary discussions. Employers should take the results to heart create the most equitable compensation strategy possible.

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Written by Laura Dowling, SPHR

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