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Should You Discuss Your Salary With Colleagues and Friends?


Robby

This is one of those topics that you can’t summarize in one word. Should you reveal your salary to the people you work with? The answer is yes, and no, but yes, it probably doesn’t matter, and it’s complicated.

And here in Indiana, it’s not any clearer than it is anywhere else.

Paycheck
© Flickr User Andy Nguyen

Yes, You Should (Feel Free) To Discuss Your Salary

What you get paid is your business. If you want to broadcast to the world, what’s wrong with that? It’s your money. It goes into your bank account. It seems totally reasonable that if you want to tell people what you make—including your coworkers—you can do so.

In fact, there is a huge benefit to sharing your salary with others. If everyone knows what everybody else makes, it’s much easier to negotiate salaries. It’s less likely anyone will be overpaid or underpaid. It seems like everybody wins.

No, You Can’t Discuss Your Salary

According to a 2003 study of pay secrecy policies about a third of private-sector employees have specific rules prohibiting employees from talking about their salary with coworkers. Only about 7% reported encouraging open discussions about pay. And furthermore, most managers felt that people shouldn’t discuss pay at all.

And in general, disputes of this nature are covered by the National Labor Relations Act (NLRA) and managed by the National Labor Relations Board (NLRB). Lots of groups aren’t covered by statute under the NLRA, and as a matter of policy the NLRB only gets involved for significant employers. People for whom there can be a pay secrecy rule include:

  • Employees of state and local governments, including public schools, libraries, and parks, Federal Reserve banks, and wholly-owned government corporations.
  • Employees who provide solely agricultural labor
  • Employees who provide domestic service of any person or family in a home
  • Persons employed by a parent or spouse
  • Employees who are actually independent contractors
  • Employees who are supervisors
  • Employees at retailers with a gross annual volume of less than $500,000
  • Employees at health, childcare organizations, and law firms with a gross annual volume under $250,000
  • Employees at cultural or educational institutions with a gross annual volume under $1,000,000
  • Employees at religious institutions

Those NLRA/NLRB exceptions cover a ton of people. And lots of companies have policies against discussing pay. And even if they don’t, Indiana is an “at will” employment state, which means you can be fired even if there is no written policy or for no reason at all.

But Yes, Salary Discussion is Largely Protected

For the most part, you are legally protected. And people who are negatively affected by talking about their jobs who go after remedies tend to be successful. Look at this case of a civil engineering company in Houston. In reality, most people just don’t know about the law, and thus most people never talk about it.

It Probably Doesn’t Matter

It’s really hard to find compelling evidence that pay secrecy has much of an effect on the economy as a whole or individual experiences of employees. A paper from the National Board of Economic Research lends experimental support to the idea that companies aren’t really much more profitable if they get rid of wage secrecy.

There’a also some evidence to indicate that the outcome of changing to a transparent pay model is often bad for employers. And while lots of states have pay secrecy laws on the books or under consideration, Indiana isn’t one of them.

It’s Complicated

There is no good answer. And although groups like The National Law Review are trying, it’s tough to predict what will happen.

Your best strategy is probably to decide if it’s worth talking about it and understand that you may have to face the consequences. This is one area where the best option is not at all clear.

But knowing that puts you ahead of almost everyone. And when almost everyone knows the laws and has done the research, we’ll be in a better place as a nation.

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About the Blogger:

Robby Slaughter is a productivity speaker and expert. He is a principal with a AccelaWork, an Indianapolis consulting firm.

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