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Pay Confidentiality

You May Want to Reconsider

Mike Haberman

A survey conducted by HRNext.com found that the issue of pay confidentiality is still an important issue for many companies. The poll conducted last year, showed that 36% of companies today prohibit employees from discussing pay. Fifty-one percent (51%) had no policy and the balance did not care if employees discussed pay. John Brady, President of HRNext, said the trend is away from prohibition of employees discussing pay. As the article on HRNext said "The survey results show that that the number of companies with policies prohibiting wage discussions has declined in recent years. Brady contends that has occurred for a variety of reasons.

· Open and younger employees. In a full-employment economy with more and more Gen X and Y workers, reluctance to discuss salary information with a co-worker has faded. Many traditional workers, now representing less and less of the workforce, used to view such sharing as a workplace taboo.

· Open compensation systems. Brady says, "more and more employers realize that a modern compensation system works best when it is open. "You publish the pay scales and let employees know what they have to do to make more. It’s less controlling, and puts employees in charge of their own futures." he added.

· Legal Problems. Perhaps most important is a growing recognition of the legal problem concerning policies forbidding worker’s pay discussions. HRnexts on-line HR Library points out that the National Labor Relations Board (NLRB) has consistently ruled that employees have a right to discuss their pay as a "concerted activity." Interfering with that right could be seen as an unfair labor practice. Certain states, especially California, have vigorous laws on the books protecting that right."
The section below details the section of the NLRA that discusses the issue of pay confidentiality.

National Labor Relations Act
Also cited NLRA or the Act; 29 U.S.C. Sec. Sec. 151-169
[Title 29, Chapter 7, Subchapter II, United States Code] Rights of employees
Sec. 7. [Sec. 157.] Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3) [section 158(a)(3) of this title].


Unfair labor practices
Sec. 8. [Sec. 158.] (a) [Unfair labor practices by employer] It shall be an unfair labor practice for an employer - (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 [section 157 of this title].
Conclusion
If you have a policy prohibiting employees from discussing pay issues with each other you run the risk of being in violation of the National Labor Relations Act and you may want to reconsider.

Note:
This information is not intended to provide legal advice and is provided for educational purposes only.