Transparency Hurdle: Workers Don’t Want Their Pay Disclosed

Women, racial minorities are most likely to favor pay transparency

By Stephen Miller, CEBS May 16, 2016
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More than 7 in 10 U.S. adults don’t think private companies should disclose employee wages internally, according to the findings from a Marist Poll released May 3. Yet Americans do favor including salary or wage ranges in new job postings instead of a fixed rate of pay.

“There’s no doubt that when it comes to publishing wages, most Americans think it’s a sensitive topic and a private matter,” said Lee M. Miringoff, director of The Marist College Institute for Public Opinion, in a statement.

Among the responses from the more than 530 poll respondents:

  • 58 percent of Americans think making salaries public would cause conflict between employees rather than increasing fairness of pay within the company.
  • White respondents (63 percent) are more likely than racial minorities (51 percent) to think publicly releasing salary amounts would cause friction within companies.
  • Men (79 percent) are more likely than women (67 percent) to say employees’ wages should not be published within companies for everyone to see.

The poll of adult U.S. employees, conducted in April, was commissioned by PBS affiliate WGBH Boston, which posted charts of the findings.

“What jumped out at me is that many people don’t want their co-workers to know what they earn. They may want to know what other people earn, but they don’t want other people to know what they earn,” said Valerie Samuels, a partner with law firm Posternak, Blankstein and Lund in Boston.

Samuels, whose practice focuses on pay discrimination law, noted that there are degrees of pay transparency, extending from “deep transparency”—where everyone’s salary gets posted online—to more-generalized approaches, such as disclosing pay ranges and median pay for job positions.

“At a small company, there may be just one person holding a particular job, and so when disclosing pay information for the position, whether it’s a median or a range, there’s no way to shield that employee from having their pay disclosed,” she noted.

Countering Pay Disparities

While a majority of women and nonwhite Americans expressed reluctance about having their pay disclosed, white men were the most reluctant.

“Women and people of color are more likely to favor pay disclosure because both groups are more likely to encounter pay discrimination,” Samuels assumed, based on her experience as a litigator. “Greater pay transparency would benefit women and people of color during the application process, so that at least people know a median or a range” when negotiating pay for an open position.

“My experience has been that women have a hard time negotiating for themselves for pay equity,” Samuels said. “I’ve read that men will ask for 30 percent more than women, on average.”

The National Labor Relations Act (NLRA) has for years been interpreted to preclude any kind of retaliation against employees—whether or not they are in a union—who discuss their wages, Samuels said, “but employers often ignore the NLRA except in unionized situations.” She sees employers trying to crack down “all the time” on employees who discuss their pay, even though responding that way is illegal. “I see handbooks that contain the same old tired statements saying, ‘You can’t discuss or disclose salary or wage information,’ ” she remarked. “When revising handbooks, I cross those statements out and then have to explain to employers why that’s just unlawful.”

In January, regulations issued by the Office of Federal Contract Compliance Programs took effect, prohibiting government contractors and subcontractors from retaliating against employees who inquire about or disclose employee compensation.

CEO Pay Ratio Looms

Next year, public companies will be required to disclose to employees how median employee pay compares with CEO compensation—commonly known as the CEO pay ratio. “I think it’s going to create quite a stir because rank-and-file employees know that the boss makes a lot of money but they may not realize quite how much we’re talking about,” Samuels said. “The disparity between C-suite executives and the rank and file has grown enormously since the ’70s. So this is going to add more fuel to the fire of people who are chomping at the bit for a $15 minimum wage and for less of a disparity between top executives and the people who are on the line doing the work.”

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.

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