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What is Pay Secrecy? Can Employers Punish You for Revealing Your Salary?

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Pay secrecy has been a hotly debated topic recently, especially in light of gender wage gap issues and the question of whether or not salaries should be an allowable point of discussion in the workplace. For years, most employers have held that employees are not allowed to discuss their pay with other coworkers. Some have gone as far as to punish those who do with mandatory unpaid vacations or demotions. Yet these employers are in fact breaking decades-old laws that protect employees’ rights to tell their salaries. If your employer has retaliated against you for discussing your salary, learn your rights.

Understanding ‘Pay Secrecy’

Pay secrecy refers to a common workplace policy that prohibits employees from discussing their pay. Many employee handbooks may impose some such policy, implied or explicitly. Some managers verbally tell employees not to discuss their salaries. However, the National Labor Relations Act of 1935 made talking about pay legal in the American workplace. Even if an employee signs a non-disclosure agreement with an employer, he or she still has the legal right to discuss pay with coworkers and others. Therefore, it is technically illegal for an employer to impose pay secrecy rules or punish employees for discussing salaries.

In 2014, President Obama signed an Executive Order for non-retaliation for Disclosure of Compensation Information. The Order put two executive actions in place to promote the idea of equal pay for equal work and to create salary transparency in the workplace. The goal of the Order was to help women spot discrimination more easily so they can do something about it. Although the Order only reinforced pre-existing laws, it served to educate many Americans on their rights to discuss salaries – an important feat in many workplace environments that had imposed pay secrecy rules. Today, many employees still don’t realize their legal rights to discuss salaries by law.

In 2015, California Governor Jerry Brown signed the California Equal Pay Act, an aggressive equal pay law that expanded on existing anti-discrimination in the workplace laws. Under the Act, employers cannot prohibit employees from discussing their own wages or the wages of others. Employers cannot retaliate against employees for discussing their salaries or for encouraging other employees to exercise their rights to do the same. The only time it may be illegal to discuss wages is if an employee in charge of company wage and payroll information discloses information without permission. If you see pay secrecy in your workplace, you have options.

Fight Against Employer Retaliation for Wage Disclosures

Despite federal and state-specific laws that enable and even encourage employees to openly discuss their salaries with others, many employers still uphold pay secrecy rules. Many imply these rules instead of stating them outright or in writing, discouraging employees from discussing their wages and implying retaliation if they do. These actions are technically illegal, breaking more than one law that protects employees’ rights to talk about what they earn. Furthermore, it could be a sign of wage discrimination based on age, gender, ethnicity, or another demographic.

Pay secrecy has been illegal for more than 80 years. If your employer engages in any pay secrecy rules, you have the right to report your employer to the proper agency. Retain an attorney with experience in labor laws for help applying to the right governmental agency – especially if you’ve faced retaliation from your employer for discussing your salary or the salaries of others. You have every right under federal and California law to talk about your wages in the workplace. You may be eligible for compensation from your employer for lost wages, demotion, or loss of your job in the event of unfair and illegal retaliation.