The gender pay gap has been a salient and persistent issue within the workplace. With major firms like Goldman Sachs and Dell settling class action wage discrimination claims for millions of dollars, employers must be cognizant of the lasting effects that wage disparities can have, not only on employee morale and retention, but also on liability.
A recent New York Times article outlines the possible benefits of divulging wage information. Pay transparency can effectively mitigate salary discrepancies based on race and gender, especially considering that women and minorities are often at the lower end of the pay grade. While publicizing each individual employee’s salary may create unnecessary animosity, reporting pay bands could be a favorable method of promoting a culture of transparency.
The National Labor Relations Act (NLRA) protects employees’ rights to discuss wages or working conditions, whether or not you are a union member. Yet, pay secrecy is still widespread as many employers discourage employees from discussing their wage information with others. This problem has been compounded by a widespread cultural taboo of talking about salaries, which is deemed to be private and to be contained within an employment relationship.
Disclosing salary information could initially be upsetting for employers and employees alike. Employees often link their wage to their utility or value, which could exacerbate frustrations for those who believe they were paid less than their counterparts with similar backgrounds and skillsets. Yet taking this possibly troubling step may be necessary to reduce unwarranted pay disparities and foster a transparent work environment.
Publicizing pay band information, without disclosing each individual’s salary, would signify to employees that their employer can be trusted. A Glassdoor survey showed that 65% of surveyed US millennials value a strong workplace culture over high salary. Sharing salary information isn’t necessarily about offering higher salaries to everyone, but more so about encouraging a culture of transparency that is becoming increasingly important in this information age. Salary sharing can be a necessary step toward embracing a future workplace that is fully meritocratic.
Please contact us if you have any further questions about pay transparency. Our firm can help employees who believe they are being paid unfairly, or employers with questions about fair compensation or pay bands.
