Workers are often told not to talk about how much they earn. It’s not legal.

ASHEVILLE, NC – Federal law states that it is an unfair work practice to prevent employees from talking to colleagues about pay. However, workers, lawyers and labor experts say that such “pay gag” violations are widespread, with at least being aware of the law.

Whether it is formal company guidelines or spontaneous words from a supervisor, a strict prohibition or a softer request, any communication that might reasonably prevent employees from sharing their salaries is in the vast majority of cases a violation of the National Labor Relations Act.

“It’s not limited to any particular industry, or even employees or workers,” said Jeff Hirsch of the University of North Carolina School of Law. “One of the reasons it’s so widespread, even though it’s clearly illegal, is that most people have no idea.”

Despite the law, many companies continue to respect salary secrecy. A 2021 nationwide study by the Washington-based Institute for Women’s Policy Research found that nearly 50% of full-time employees reported being advised against or banned from discussing workplace pay.

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The report found that pay privacy policies disproportionately affect women and are more common in areas like the American South, where unions are few.

But while wage sharing remains a taboo for many, it could gain momentum. Studies show that younger workers tend to be more open about their salaries, and as staff shortages have pushed starting salaries up, service reps say they have become more curious about what new hires are making.

This dynamic can lead to further disputes between workers and management over the distribution of wages. Legally, workers can do this, but the law means little if it’s a right they don’t know they own.

Clear law, weak punishment

The National Labor Relation Act of 1935 is the backbone of American labor law. In court it was interpreted as giving workers the right to discuss wages “for the purpose of collective bargaining or other mutual aid or protection”.

Any employee directed not to discuss his or her pay can file a complaint with the National Labor Relations Board of unfair labor practices. Supervisors don’t have to be mandatory or absolute in their messages to justify a fee; even politely telling an employee not to say how much he earns can be considered a violation.

The NLRB does not track how many unfair labor practices charges are raised in connection with wage discussions, but department spokeswoman Kayla Blado said it was “not uncommon” for workers to be asked to remain silent about their wages.

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Anyone fired or demoted for wage sharing is entitled to reinstatement or back payment, but otherwise the NLRB cannot impose fines on companies that violate the company. Instead, companies must start allowing open wage negotiations and posting a notice at the workplace informing workers of their right to continued pay.

Some say these consequences would do little to deter employers from upholding salary secrecy.

“The penalties for breaking this law are shamefully small,” said Jake Rosenfeld, professor of sociology at Washington University in St. Louis and co-author of the Institute for Women’s Policy Research’s report on salary secrecy laws.

Another factor that leads to the sustainability of labor law measures in the workplace, emphasized Rosenfeld, is the fact that many employees do not tend to discuss their wages with colleagues in advance.

Tilt the scales towards work

Union officials believe that knowing what others are making helps workers identify inequalities that could motivate them to unionize.

However, some see a link between low level unionization and managerial policy.

“Employers have kept employees from discussing (wages) since the beginning of time because this is the first step in organizing,” said Ana Pardo, co-director of the Workers’ Rights Project at wie’s progressive North Carolina Justice Center Chapter 1 of the Handbook for Bad Employers. “

But not every manager who would prefer workers to keep quiet about money thinks of union busting, says Josh Armbruster, a former restaurant manager in Asheville, North Carolina.

With the city’s high cost of living, many people in the local service industry understandably have money on their minds. But when running a local kitchen, Armbruster never wanted salary differences to arouse harsh feelings, especially when he thought some of those differences were related to variations in job performance.

“I’ve never specifically told anyone not to share their wages, but before that I told them my philosophy is not to talk about money because it’s the easiest way to upset people,” he said .

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However, his philosophy changed when the pandemic broke out. When Armbruster saw waiters, cooks, and line staff calling back to work while the number of cases was still rising, Armbruster felt the service staff needed more power. As a chef at another restaurant in the area, he believes the transparency of pay can tip the scales, albeit marginally, in favor of workers.

The higher salaries that are currently being offered to attract urgently needed workers are one more reason for Armbruster to split their hourly rates in order to find out the fair market value and to claim it for themselves. But higher starting wages can also be a reason for some employers to keep wages down – so that long-term employees don’t notice that their new colleagues are taking more home with them.

“Now suddenly you’re hiring someone for $ 18 an hour, which has become the standard, but what happens to people who were hired a year ago and make $ 15?” Said Armbruster. “That can lead to conflict and that is likely to be an increasing situation.”

“See yourself as a free agent”

Of course, many workers withhold their salaries not out of respect for what their superiors want, but because it can be deeply uncomfortable.

“We have a culture that discourages it,” said Pardo. “People don’t want to talk about money. It’s like talking about religion and politics. It’s uncomfortable.”

As a result, many may not know what the person in the other cubicle or on the other end of the Zoom call is making.

While employer review sites like Glassdoor offer a window into how companies are paid, UNC’s Hirsch pointed out that this data is often incomplete and certainly not uploaded for all companies.

In recent years, states have become more active in wage transparency. Twenty-one states now have laws prohibiting employers from maintaining salary secrecy.

That year, Colorado required employers to post salary ranges for job vacancies, while California became the first state to require employers to provide salary data by race, gender, and job category.

And as new generations join the workforce, the cultural mores surrounding wage transparency seem to be shifting.

According to the Institute for Women’s Policy Research report, millennials are almost twice as likely as baby boomers to discuss their salaries with colleagues. The report found that more than half of millennials – people aged 40 and younger – openly discuss pay.

“Younger workers find themselves in an increasingly precarious economy, an economy in which the operating rules of their parents have changed dramatically,” said Rosenfeld. “The companies in which their employees often show them little loyalty and they therefore have to think of themselves as free agents.”

These “free agents” can increasingly come across the written and unwritten wishes of the employers to keep the payment secret. And when that happens, workers have options.

Follow Brian Gordon on Twitter: @ briansamuel92.