For decades, one of the biggest workplace taboos has been talking about your pay with your co-workers.
It’s no surprise: the subject of money often falls right behind politics and religion as one of the big three taboo conversation topics. (Sex and family sometimes claim the third spot, but this is a business column, so we’re going with money.)
Add in workplace dynamics, organizational hierarchies and historical pay inequities, and you quickly realize that employees feel more comfortable talking with each other about weekend plans, new restaurants or the Eagles game. Even most workplace gossip often avoids the topic of pay.
It’s companies that generally benefit when employees do not share their pay. Without the ability to compare, employees are in the dark about whether they are being compensated comparably to their peers. Employees have less information and negotiating power, which gives employers the upper hand in minimizing their payroll expense.
However, a new era of transparency is beginning to break down the workplace taboo.
A big source of transparency is Glassdoor, a website where employees can find jobs as well as review workplaces and senior management as if they were rating the new Thai place down the street. Additionally, Glassdoor has crowdsourced salaries for positions in each geographic market. Click on “salaries” from the main menu and you’re taken to a screen that reads, “Are you paid fairly? Find out.” Enter the position and city, and the database returns an average and pay range.
It doesn’t stop there. You can get much more granular by selecting an employer and seeing compensation for specific positions based on anonymous feedback from current and past employees.
Regulations are also playing a role in enhancing transparency. As of early 2022, there are 21 states and 21 localities that prohibit some or all employers from requesting salary history. In some jurisdictions, employers must disclose the pay range for any job that is posted. The new regulations are intended to counter legacies of pay discrimination according to gender, race, age and other factors.
In Pennsylvania, state agencies may not ask about a job applicant’s current compensation or compensation history at any stage during the hiring process. All job postings must clearly disclose a position’s pay scale and pay range. Pittsburgh prohibits a discussion of an applicant’s prior pay for openings at any city office or agency. Philadelphia’s expansive “Wage Equity Ordinance” extends to all private-sector employers in the city limits. We can expect regulations like these to expand to more states and municipalities.
How can business owners or managers address the increasing transparency?
Be proactive with current employees. A culture of total secrecy is becoming increasingly dangerous. (However, sending an e-mail with everyone’s salary or hourly rate comes with its own issues.) Make sure you have strategies and policies in place for equitable compensation. Adjust salaries that are inconsistent with your policies. And be ready and able to defend how you’re compensating each employee.
Do your research with new positions. Applicants will be checking Glassdoor for pay ranges in your geography and previous positions at your company. Are your current salaries and open positions in line with the market? You need to have the same information as your current and prospective employees.
It’s about more than the money. Equitable and competitive pay is important. But as I’ve shared many times in this column, company culture is more important than financial compensation when retaining and recruiting employees.
Follow the law. Stay abreast of state and local laws regarding the salary history question or the need to post salary ranges for each position.
If you are an employee or job-seeker, the advice is similar. Do your research on Glassdoor and other sites to determine salary ranges. Information is power! Know the laws in each jurisdiction so you can decline a potential employers’ request for salary history. And if you gain the trust of your coworkers and discuss pay, realize that it is unlawful for your employer to punish you for having the conversation, interrogate you about it or prohibit having the discussion. Charges can be filed with the National Labor Relations Board.
The trend is clear: the topic of compensation will continue to become more transparent as crowdsourced information, online tools and regulations proliferate. The taboo is lifting. How will you be ready when it goes away at your workplace? Because once it’s gone, it’s gone.