Lifting of salary secrecy bans – US experience

My assumption, around the lifting of salary confidentiality restrictions, is that this will not lead to immediate employee “lunch and compare” sessions. The new EU transparency rules mean that all employers will need to remove any contractual pay-confidentiality restrictions or, presumably, they will become unenforceable.

A recent article (link in comments) by Jake Rosenfeld , Michael M. Oswalt and Patrick Denice looked at the lifting of pay secrecy laws in the US found some interesting findings which will translate across to the EU.

• Despite the lifting of secrecy bans, ?just under half of employers continued to enforce pay secrecy – either through formal (contractual, staff handbook etc) or informal (managers discouraging discussions) methods.

Unsurprisingly, there was a shift towards informal enforcement and over one third of workers reported that their boss discouraged discussions (Compare this ?with the similar result - over one third reporting the same where based in those states with secrecy bans – to realise how little progress has been made under the new laws!)

• When asked if they supported their employer’s stance on pay secrecy, 70% of workers said they did. This is higher than expected and, perhaps, recognises the legitimacy given to employers.

However, it is lower than the 85% of whom said they supported freedom to discuss pay. Overall, workers clearly prefer transparency when given the opportunity.

They conclude that workers need extensive education to understand their rights along with greater enforcement methods.

I would add that employers need to equip line managers to engage with employees on pay transparency. It should be expected that employees will have such salary discussions and the organisation, as a whole, needs to understand its pay structure and approach.

Photo credit: Victoria Gibbs