Pay Secrecy in the Workplace
August 6, 2014

In August 2013, New York City clothing salesman Wade Groom made the news, claiming the company Lacoste fired him from his job for posting a picture of his paycheck on Instagram, captioned by a statement that he was only making enough to live in a “third world apartment.” While the company did not comment on the reason for firing Groom, Groom’s thinking regarding why he was fired is not outside the realm of possibility.

In fact, workplace policies forbidding employees from discussing their pay are not uncommon, even though the National Labor Relations Act prohibits them. Unfortunately, many businesses do not fully understand the laws, and operate under fear that full disclosure of employee salaries would cause conflicts among staff and decrease job satisfaction overall. It is also a possibility that some businesses, while aware of the law, are willing to pay the financial penalties if a complaint is filed against them with the National Labor Relations Board. A 2011 survey conducted by the Institute for Women’s Policy Research shows that pay secrecy rules are still quite common. Approximately half of the workers responding to the survey reported that discussing their salary information is either discouraged, prohibited, and/or could lead to negative consequences.

President Obama has taken notice of the issue of pay secrecy, and is on a mission to put it to an end. In April 2014, he announced two executive actions which serve as a reminder of the current laws and promote the idea of “equal pay for equal work,” starting with those working within the federal government. The first order directs the Department of Labor to collect data on what federal contractors are paying their employees, in order to spot any pay discrimination. The second order prohibits federal contractors from retaliating against employees who discuss their salaries or other compensation with others. The President has issued the message that, “Pay secrecy fosters discrimination and we should not tolerate it.”