Recently we had an
uncomfortable problem arise when a manager we hired last year told a group of other
managers how much he was making. The other managers have all worked for our
company for at least 10 years and became upset when they found out this new
manager was making more. There are various reasons why this new employee is
earning a higher salary, but we don’t feel like we need to justify what we pay
to these other managers. To avoid this situation in the future, can we tell
employees they are not to discuss their salaries?
– Judie in
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The simple answer to
your question is no, as both state and federal law prohibit employers from requiring
employees to keep their wage and salary information confidential.
First, California Labor
Code Section 232 forbids disciplining or discharging an employee who discloses
the amount of their wages. Second, a prohibition on wage discussions among employees
could violate the National Labor Relations Act (NLRA), regardless of whether
your employees are covered by a union. The NLRA gives employees “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.” The National Labor Relations Board (NLRB) interprets
this language as prohibiting employers from limiting employee discussions on
salary, benefits, and job conditions. This rule does not differ based on
whether the employees are exempt or nonexempt.
Thus, maintaining a policy that discourages or prohibits employees from
discussing pay increases and pay rates would violate the NLRA. In fact, in one
case, the NLRB found a broad confidentiality policy that prohibits discussing
confidential business information to be a violation because it could be
interpreted to prohibit conduct protected by the NLRA.