For some employees, one of the hottest pieces of gossip is the scuttlebutt on raises and compensation. Depending on the company and industry, salary information may be considered by an employer to be highly “proprietary” information, which, if disclosed, has the potential to disrupt employee morale and retention. We periodically review employee handbooks and policies from our clients that contain strict prohibitions on the disclosure or discussion of compensation and/or benefits by employees. Unfortunately, such policies are highly problematic.
As Amazon.com recently experienced at its warehouses, the National Labor Relations Board (NLRB) is pursuing employers who prohibit salary and benefit discussions amongst employees. Under the current Board, the National Labor Relations Act (NLRA), in general, allows employees to communicate about pay and working conditions, free from retaliation, so that they can presumably bargain for better wages and/or benefits. As such, a salary and benefit non-disclosure policy will generally run afoul of the NLRA. This is not an intuitive concept for many. Managers and supervisors may require training to ensure “salary gossip” is not discouraged. Moreover, so called “lawful activities laws” in certain jurisdictions (e.g., New York) afford additional protections to employees who engage in personal and other enumerated activities during non-working hours.
What is an employer to do? We would, foremost, recommend reviewing your employee handbook and other policies to ensure compliance with federal, state and local labor and employment laws. In addition, increasing transparency regarding your company’s criteria for salary determinations, or even salary “ranges” if so inclined, can help diffuse gossip about compensation. Moreover, periodic reviews of salary and benefits during specified times, which are known to employees, may also help minimize or compartmentalize salary discussions.