Your employees’ right to discuss their pay, wages, and benefits with each other is protected by a federal law known as the National Labor Relations Act. Even if you have a policy or agreement in place aimed at preventing your employees from discussing pay, your employees’ right to have those discussions is still protected by federal law.
When one employee finds out that another employee makes more money, it can send ripples throughout your entire workplace. In light of the morale damage this kind of talk can cause, you may be tempted to tell employees not to discuss salaries at all. The problem is that having a policy that aims to prevent employees from discussing pay could present a legal liability for your business.
FREE DOWNLOAD: Employee Concern Reporting Form
What Is the NLRA?
The NLRA or National Labor Relations Act, is a large, developing area of federal law that’s rapidly changing the way you can regulate your employees’ speech, both on and off the job. Section 7 of the NLRA grants union and non-union employees alike the right to engage in certain activities so they may collectively bargain.
These protections all employers of all sizes in all 50 states and protect all speech related to employment conditions like scheduling, safety and, yes, wages as well.
Whether your office is big or small, unionized or not, an NLRA infraction is easy to spot, even easier to prove and the number of small practices prosecuted over these violations keeps growing. With that in mind, it might be a good time to take a look at what the NLRA has to say about employees discussing pay.
What Does the NLRA Say About Employees Discussing Pay?
The NLRA protects two or more of your employees talking among themselves about any aspect that could improve working conditions, including discussions about wages and salaries.
Because this legislation is federal, it applies to every single workplace regardless of size in every single state including those with at-will employment laws.
Even mentioning but never enforcing a ban on salary talk in your handbook is a violation of Section 7. Wherever your employees communicate among themselves, Section 7 protects employee discussions about pay. This applies to happy hours, work trips, email, social media as well as your own office, no matter how few employees you have.
What Can I Do to Prevent Employees Discussing Pay?
While you can’t stop employees from discussing pay with other employees, you can reduce workplace resentment by helping your employees understand the rungs on the ladder to better compensation. The three practices below can help you keep your business compliant and your employees on the path to success:
Establish Pay Bands
Setting explicit salary ranges and standards for how employees can increase their pay rate, otherwise known as pay bands, makes it much easier to explain to employees why they are paid the way they are and what they can do to earn more.
Pay bands typically include things like:
- Prior Experience
- Time in service to your practice
- Education level
- Personal performance
Review Your Paperwork
If you have an employee handbook that was not created by CEDR, have an attorney or CEDR review it to make sure it doesn’t prohibit employees from talking about their wages. If you have a confidentiality or non-disclosure agreement, make sure it doesn’t go too far in limiting what your employees can and can’t talk about.
Require Employee Concern Reporting
Develop a policy that requires employees to immediately address their workplace concerns with you or another member of management to eliminate feelings that an employee is not valued. All CEDR handbooks include this policy. You can also download a free Employee Concern Form from CEDR’s HR experts here.
Set Clear Expectations
Consistently conduct performance reviews. Communicate your expectations and let your employees share theirs. This eliminates the appearance that your pay model is arbitrary. Give your employees job descriptions that clearly outline their duties. This will keep them on track to exceed your expectations with the goal of better compensation.
Free Employee Handbook Evaluation by HR Experts
Talking about salary discrepancies with your employees is uncomfortable. It’s so uncomfortable, many managers are tempted to avoid it altogether, telling employees not to discuss pay at all. However, doing so not only runs the risk of putting your business out of compliance, it can create resentment and hostility among your workforce. Rather than focusing on controlling what employees say, shift your focus to helping your workers visualize a clear and attainable path to success through open lines of communication and clear expectations.
Click here to learn more about how a CEDR employee handbook can help you protect your business.