can an employer require you to keep your salary confidential?

Share on Facebook30Tweet about this on Twitter16Share on LinkedIn8Share on Google+0Share on TumblrDigg thisShare on StumbleUpon0Print this page

A reader writes:

At my current employer, we’re being asked to sign a new legal agreement before they’ll process our bonus checks. One thing in the paperwork that caught my eye was this clause:

“1. Confidential Information. Both during and at all times after termination of my employment with the Company for any reason or no reason, I shall not use, disclose, publish or distribute to any person or entity any Confidential Information except as required for performance of my work for the Company or as authorized in advance and in writing by the Company. For purposes of this Agreement, ‘Confidential Information’ means … any information regarding my compensation or the details of my benefits package with the Company.”

First off, I’m wondering if this would apply to something anonymous like Glassdoor.com? Second (and I know this is asked a lot with usually the same answer)…is this legal? Articles like this one make me wonder if the NLRA applies in this case.

The National Labor Relations Act says that employers cannot prevent employees from discussing wages and working conditions among themselves. The idea is that employees need to be free to organize, and preventing them from discussing these topics would prevent them from organizing.

(There are some exceptions to this though. An employer can prohibit these discussions from taking place during times when people are supposed to working. And while employees can freely share information about their pay with other employees, they wouldn’t be protected by the law if they obtained information about other employees’ pay through files known to be off-limits to them or if they get others to break access restrictions and give them confidential information. In other words, Tom can tell you how much he makes, but getting the bookkeeper to tell you how much Tom is making wouldn’t be protected by the law.)

However, the law only applies to discussions within the organization. An employer can prohibit employees from discussing salary outside the organization. So yes, anonymous posts on GlassDoor would be a violation of the policy, if they were able to trace the post back to you.

There’s an upside to this policy though:  The next time you’re interviewing and an employer asks about your salary history, you can truthfully reply that your company prohibits you from sharing salary information externally.

{ 104 comments… read them below }

  1. Mlhd

    So you can’t technically tell your own spouse how much you make? Do you have to ask permission to fill out applications that require your income, like a loan or fafsa?

    1. Under Stand

      Technically, under the terms of the contract, I would expect yes. Of course, I would want to know how much more your compensation would be for the inconvenience.

      Their answer, I would imagine would be that you still have a job.

    2. Ask a Manager Post author

      The law allows for commonsense exceptions, like the sorts of forms you’re talking about, your accountant, your spouse, etc. But it does allow companies to consider their salary structure to be a trade secret and something they can prohibit being released outside the company, to competitors, etc., and courts have upheld that.

    3. KayDay

      That’s a good point. The OP should ask them for clarification on the matter, because income information would be required to purchase a house, rent an apartment, get a car or student loan, get a new credit card, etc. I’m am also guessing a judge in any child support hearings or divorce settlement hearings would want to know the salary as well, but I have no experience with that! I would not want to have to go to my company to get “permission” to do these things.

      Also, while it would be great to refuse to disclose your current salary at future job interviews, some companies may not hire you without it.

      Honestly, if this company expects you never to, without their permission, get a car loan, buy a house, or rent a new apartment while employed there, and wants to make it difficult for you to find a new job, I would start searching for something different now.

    1. Long Time Admin

      We have this same policy at my company. My best friend works here, too, and we have never discussed how much we each earn. We do have different kinds of jobs, and she has a little more seniority than I do, so I would expect that she’s bring home more money every month.

      One guy was fired last year for snooping in other employee’s pay envelope. I’m not sure if it was for snooping, or for learning how much this other person earned.

  2. Mike C.

    AaM, your answer doesn’t make sense to me. If one is able to discuss salaries amongst other employees for the purposes of organizing, why wouldn’t you be able to discuss it with the union representative?

    Away from the legal issues, I’m really tired of this attitude that salary should be kept secret. First of all, it’s the best way to hide discriminatory pay practices. Secondly, when everyone knows what everyone else makes and what it took to get to that point (in terms of skills, experience and the like) then employees have a clear example of what is expected of them and what they can do to earn more money.

      1. Mike C.

        No worries, I don’t blame you for the state of labor law :p

        My company actually publishes useful salary ranges for just about every position/grade/location. It turns out that we all still act like adults!

      2. yalm

        I confess that I see both sides of this issue.

        We know salary differences/inequities happen for all sorts of reasons: when an employee joins and what the hiring salary ranges are at the time; differences in how bosses appraise their employees; internal transfers from other departments; acquisitions; locational differences… Oh, and actual performance, of course.

        Couple this with wage freezes that many companies have had in place over the last few years, and those inequities don’t get fixed. Will employees “get” it? Anecdotal evidence is mixed. I think, or delude myself into thinking, that most would handle it well enough. I know a couple of people who absolutely don’t want to know what others make because they know it will bother them. I know a couple who would be angry to know what so-and-so is making because personal animosities would override logic. Really, that’s the last thing I need. Money does strange things to people.

        On the other hand, would making salaries public within the enterprise force the money to flow so we could address the real inequities? I don’t know. Certainly it’s possible. Is there much evidence that this has worked?

        1. Mike C.

          Well I work for a company of hundreds of thousands and it’s not an issue. Like I said earlier the ranges for all positions are openly known, and folks who are on the same tier generally know in great detail how much others make.

          We have open discussions about it as well, and there’s no bitterness or infighting because the reasons for different wages are due to experience and skills and the like. The companies who hide this information for their employees are simply playing games or don’t respect the maturity of their employees – which makes me wonder why they were hired in the first place.

          I mean think of it like this: we’re all swimming neck deep in proprietary information at work. Why would a company trust me with that, but not trust me to know how much the guy next to me is making?

    1. Ask a Manager Post author

      Oh, and if you want to be even more baffled, I can add that the NLRA’s prohibition on preventing these discussions only applies to non-supervisory employees.

      1. Tami

        Ok wait so there’s a law that says “employers” can’t prevent workers from sharing pay information with one another BUT the “employers” who are so prohibited are defined as non-supervisors?

        Am I reading that right or has 14 hours of science homework fried my brain?

          1. Tami

            OIC Gotcha, thank you for that clarification. I was having trouble wrapping my head around that.

            Interestingly, most places I have worked have had written prohibitions against employees disclosing their pay to another employee. The only place I did not have that was working for a large company that had set pay scales with pay rates per scale.

  3. bob

    “at all times after termination of my employment with the Company for any reason or no reason”

    Really?? Do they really expect a former employee to not disclose their salary somewhere? I know this is just boilerplate lawyer BS and I don’t really think it would *actually* be enforceable anywhere as unscionable but I’m not a lawyer and don’t play one on tv.

    1. Ask a Manager Post author

      This is actually not uncommon. And saying that your former employer prohibited you from disclosing salary is generally an effective way of getting new employers to back off from demanding it.

      1. Scott Woode

        Leave it to the English major to point out, but isn’t this a Catch-22? Employers request salary information (almost forcefully so) yet job applicants can rebuff the request with a legally approved (in some cases, mandated) response that another employer is prohibiting the release of that information?

        Does anybody else see the “round-robin” quality of this, or is it just me?

        Anyway, what I’m curious about, is why everybody just doesn’t respond that their previous employer wouldn’t allow such information to be divulged thus negating the point of the question?

        Also AaM, I loved the article you responded with by Evil HR Lady. I have to say I agree; knowledge is power, even in the case of salary.

  4. Anonymous

    Well, why not post (obviously anonymously – always use an open, public WiFi hotstop and your personal laptop, which never goes into work) a salary 20-30% lower than your actual one on Glassdoor? And be generous, and do a similar thing for a few of your co-workers as well (if you don’t know their salaries, guess, and then subtract the same percentage).

      1. Anonymous

        For fun, maybe? Arguably, it could even help the company at the next round of salary negotiations, since they could then point to your statements that such sites have too-high salaries.

          1. Anonymous

            Still could be fun to do – just wait until after you’ve left the company. In the long run, it will hurt the company, since they’ll acquire a reputation of under-paying people.

              1. Anonymous

                If they thought the job was perfect for them, what would prevent them from applying on the assumption they could negotiate the salary upwards?

  5. human

    An employer can prohibit these discussions from taking place during times when people are supposed to working.

    This isn’t 100% accurate, actually. If there is some kind of business/safety reason that people are prohibited from discussing all non-work info, then yes. But, you cannot allow your employees to talk about, idk, football or weddings, and disallow them from talking about wages or working conditions or unions.

    1. Anonymous

      Actually, I believe employers can restrict employees from talking about non-work related things like football and weddings during working hours without a “business/safety reason.” Most don’t because it would be pretty draconian and kill morale, but they can. You’re there to do a job, not socialize.

      1. human

        Yes, you’re right, they COULD ban all non-work conversations, though few companies do for the reason you mention. I may not have been clear! What I mean is they cannot have a policy that says “you can talk about football and weddings but not working conditions or unions.” And they cannot have a policy that says “no non-work conversations at all period” but then only enforce it with regard to working conditions and unions, and then let it slide when people talk about weddings and football.

        1. fposte

          Or, to put it another way, they can’t restrict people from talking about working conditions or unions even with a policy that pretends they’re doing something else.

          1. Ask a Manager Post author

            Exactly — you can prohibit non-work-conversations in general, including salary talk, when people are working. But you can’t JUST ban the salary talk.

        1. Don't post B.S.

          EVERY federal job’s salary is public record, BY LAW, and as such is accessible by anyone.

  6. Craig

    I am not in the US and thus not familiar with US law, but doesn’t a contract tend to become invalid when it is terminated? How are the terms of the contract (that relate to you) enforced after you leave a job, if they are not offering you their side (your salary) in return?

    1. Ask a Manager Post author

      Contracts around confidentiality typically don’t end when employment ends, so they continue to be enforceable — just like, say, a non-compete clause, which by definition doesn’t even start to apply until employment is terminated.

  7. Primecut

    I just filled out an application and they required salary info. I was honest and I forgot that that could be part of my nondisclose agreement. Could my former employer find out somehow?

      1. Anonymous

        But isn’t the point of this policy to stop other employers finding out the payscale at the original company?

  8. Brian

    You kind of give the prospective employer a clue about your past salary when you state your current salary requirement for him.

      1. Jamie

        Isn’t it only illegal to prohibit non-supervisory personnel?

        The NLRA has a very specific definition of supervisor, so even if no one reports directly to you, you may be lumped in depending on your duties to discipline or direct work.

        Even though Alison is right in it being illegal to prohibit it, personally if you aren’t planning to go to court over this I wouldn’t do it.

        This is a very touchy thing most places, and personally I wouldn’t stir up that hornet’s nest if I wasn’t planning on leaving.

        1. Anonynmous_J

          Oh, I’m planning on leaving–stirring up stuff is just not what I do, though. I just want to get out of here.

      2. Anonynmous_J

        Wow. I had no idea, but I WILL say I’m not surprised.

        Jamie, thanks for also chiming in. I don’t plan to go after them for it. I just thought it was kind of weird.

        I honestly don’t care if my coworkers know what I make or not, but I can see why an employer might not want people discussing it. It is also possible that I misunderstood the policy when I first read it. I need to go back and check.

  9. Richard

    This is a slightly different question, however it just happened at my office. Does an employer have the right to disclose your pay structure to everyone?
    There are about 30 poeple in my position and then we have about 400 employees total. My position just changed our pay structure due to reimbursement issues (aka a pay cut), and my employer released my new pay structure and how much I am going to earn to everyone in our organization.
    This seems unethical at best, but I am unsure as to the legality of it.

    1. Ask a Manager Post author

      Yes, it’s legal. It’s somewhat odd if they only released your pay information and not anyone else’s though. Was there some reason that your position was the one that had the info released?

  10. Michael

    I was wondering if there is something “faux-pas” legally about your boss saying “I gave you a bigger raise and bonuses then everyone else…” in front of fellow employees at a meeting? It just seems wrong to out your employees’ earnings like that. Am I just over reacting?

    Michael

  11. Anonymous

    It basically means dont tell your coworkers how much you make. because if you get paid more then others or vice versa people will say its unfair.

  12. kristy foster

    with the new legislation passed requiring equal pay for both men & women in the workplace. How am I going to find out if I am being underpaid or discriminated against . Unless my employer is required to turn over a list of all employee names (or a random number) & how much they make to any current employee if requested in writing

    if you tell me it’s Against company policy to discuss salary (a Firing offense) with other employees. or if you give a salary range – (this job pays $30k – $45k a year) how do I know how men & women fall on this scale?

  13. Proud 2 BA Receptionist

    Legally an employer can’t prevent his or her employees from talking, but from a realistic standpoint, it’s probably not a smart idea to do so. What you make is no one else’s business.

  14. debbie

    im a new hire..( 3 months) a coworker went into my private file and found out how much i earn… then told everyone in the office… because of this my employer lowered my hourly.. from 16.00 to 11.00… is this legal???

      1. Greg Price

        It’s LEGAL to penalize one employee for the actions of another that the first had no control over?

        How is that legal?

        1. Ask a Manager Post author

          It’s legal because there are no laws against it. Employers are given wide leeway in their internal policies and how they deal with employee issues.

          1. Greg Price

            That is absurd. By that logic they would have to enumerate each and every wrong employment practice in order to prohibit it.

            It is a well-settled principle of US law that one is NOT punished for the actions of a third party. That principle would seem to apply in the case mentioned. YOU should not be fired for what SOMEONE ELSE did.

            That’s wrong. It’s unjust.

            1. Ask a Manager Post author

              It might be unjust, but it’s not illegal. Your employer could fire you because your coworker wore the wrong color tie today if they wanted to. (They probably wouldn’t, but they could.) There’s only a small number of things that they’re prohibited from firing you over, such as your race, religion, sex, or other protected class, or in retaliation for engaging in legally protected activity (such as organizing), etc.

              1. Greg Price

                Then we need to MAJORLY tighten the NLRA.

                Or get some good lawyers and sue the crap out of businesses who try this.

                There is another principle of the law that says no contract may be enforced that is “contrary to public policy”. Firing someone for something they didn’t do, or prohibiting their free speech rights to tell anyone they wish what they make are both “contrary to public policy”.

  15. debbie

    Hello, and thank you for your timely answer….when you say “not smart of them” can i bring a lawsuit? this just happened to me yesterday and im in shock!!! first, im close to 50 yrs old and second when i was hired that was the hourly I was offered!!! in order to calm down these people i have to earn 11.00?? Im sorry but i know i cant keep this job…i am not able to face them… but i will try to finish out this week

    1. anonymous

      If Alison said it’s legal, then you’re taking the risk that you won’t be on the winning end of a lawsuit. And you’ll be out a lot of money.

  16. Yes, you do!

    You absolutely have a case and you should consult an attorney as soon as possible. You have, and are continuing to suffer a monetary loss. I had a client who accepted an offer out-of-state. After relocating a similar situation occurred and management responded with a pay cut. The lawsuit was successful. Don’t take the word of anonymous people or bloggers. Again, contact an attorney ASAP as he will likely have some advice for how to handle the situation in the very near term. Do not quit, do not give notice or take any action until you’ve had a consult.

    1. Ask a Manager Post author

      This is absurd. There was no relocation in this case. What law are you suggesting would be in play here? There’s no law that prevents an employer from lowering an employee’s pay for any reason, as long as it’s not due to illegal discrimination, retaliation, etc.

  17. Debbie

    Please….does anyone agree with that last comment??? Do I or don’t I have a lawsuit??

  18. Anonymous

    Is it possible to be fired for accessing other staff’s salary information. I’ve been told that I am on “leave” until a decision is made as to whether or not I have been dismissed.

  19. Anonymous

    It was queued to print on the printer, and I printed it and kept the copy in my handbag. When I left my desk for a short while, one of the manages scratched in my handbag and took the document out of my bag.

      1. Anonymous

        What about the fact that they went into my handbag to get the document? Do I have any right to raise that as an issue?

          1. Anonymous

            They rifled through it. It was in my handbag and they had to open the bag to get it. The person that went through it said that she’d seen me put it in my bag.

          2. Ask a Manager Post author

            I don’t think they’re allowed to go through your bag, but they’re certainly allowed to fire you for what you did. I wouldn’t push the bag issue, given how in the wrong you are for taking the salary issue.

    1. Anonymous

      My question is “why?” ….And why did you put it in your handbag? What did you need that information for?

      Sounds quite fireable to me.

  20. Anonymous

    Hi I want to get some feedback on my situations. Also,I lived in California.

    I was discharged from my job because I have disclosed my wage information to my friend who also work at the same company. I first told him about how much I make (specific dollar amount) when I got the job offer as we were friends throughout college and are comfortable telling each other this information.

    4 month into the work, my friend received new job duties that are very different from his original position as a customer service representative. We discuss this issue over a private dinner after work with other co-workers, including his supervisor( we also are in close relation with him). I mention that I was getting paid more than my friend, but his job sounds more important and should get paid more. Later the supervisor apply for my friend to get a raise, and mention that he should get paid more than accounting(which is my department) and the HR and their manager figure out it was me.

    Soon, I received a call from my own manager telling me that I am not allowed to share this information as it is disruptive behavior and that this is a rule in the employment handbook. And two week after the phone call I was called in by the HR informed me that I have violated the rule in the employment handbook and I am to be discharged from my position.

    I make sure to ask them the full reason for my discharge and the HR replied that the only reason is because I have violated the wage disclosure rule.

    I have read that CA Labor Code 232 that they are not allowed to discharged me over disclosing wage information and that I can file a complaint. Can I get some opinion as to how strong my case is, and if I should go through with the claim? (The time &effort versus the return) Also what are some point that I should be careful when filing so that I don’t compromise the integrity of my case.

    Thank you

  21. tony

    Can you line manager inform the other staff when you apply for a internal vacancy within the company.( this is to the person who applied for the same job befor he gave his notice)As I have applied for the post as soon as it was advertised. I feel I am let down by disclosing my interest .tony

  22. Anonymous

    I work a 40 hour work week guaranteed, Sun-Sat. On holidays My employer cuts my hours to 32 and gives me three days off, then adds my 8 hour holiday pay into my work week to make 40 hours.
    If I work 40 hours on a normal basis , wouldn’t my 8 hour holiday pay be extra ,making it forty eight hours with my normal two days off.

  23. Rebecca

    My boss mistakenly sent me a file with all company employee salaries. I opened it and advised him of his error. Can he hold this against me, thinking that I saw this info and try to fire me?

  24. Anonymous

    It is part of wage and hours laws. You CANNOT legally fire an employee for discussing wage unless they have signed an agreement not to do so. Federal laws are clearon the subject. Any manager will tell you it’s a firing offense, but the law is written so that wages will remain competitive.

  25. Anonymous

    Is it legal in CA for an employer to withhold your pay range from you? I have been employed for over 7 years and not once have I ever been told what my pay range is so now I’m told I am over my mid point and therefore any potential for raise is moot. The big question is since I never knew where I stood, how do I really know I have passed the mid point? I have asked other employees if they at least been told their pay range and every one has said they have never been given this information and it hasn’t been for lack of asking.

  26. annyomous

    The only reason they want you to keep quite is because they know they are not paying people fairly….The only reason why people keep secrets is when they are doing something wrong usually… Just like Pedophiles…

  27. Greg

    This practice should be banned by the courts as being contrary to public policy.

    It is GOOD for these details to be made public so that workers (including potential ones) can be fully informed as to wages and benefits, and so that public pressure can be brought to bear on companies underpaying workers.

  28. Anonymous

    I truely believe it is no ones buisness what anyone makes. Some places do not have a set range and hire and pay based on expeirence, so there could be differnces in the same department. I don’t care what type of workers you have there are issues when people discuss wages. No matter how you try to explian the facts people get upset and cause drama in the work place. Now when working for a big company that had a set pay scale no matter what, then it is what is and no problem. It should be left to the company to decide whether or not this should be discussed. Most people are not mature enough to handle other co-workers pay info. Seen it happen way too many times.

    1. Greg Price

      Nepotism, discrimination and crimes against the public good flourish in darkness…sunshine is ALWAYS the right answer. Bosses can’t cover up their unfair distinctions if the public has the right to examine the books.

  29. April

    I recently received a write up at work, one of my coworkers
    witnessed the ordeal which led to my employer writing me up.
    Before I went to the meeting where I received the write up, I
    contacted my coworker to find out if management contacted
    her to get a statement, My coworker told me no. When I went
    to the meeting I was handed the write up, I advised management
    that there was a witness and that they needed to contact that
    witness and get her statement, because the accusations made
    were not true. Management told me they did get a statement,
    I asked to see it and they refused. Management then told me
    that I can’t discuss the write up or the meeting with my coworkers,
    I believe they told me that because they didn’t get a statement from
    my coworker. I later contacted that coworker to inquire if they had
    infact gotten a statement from her and she told me no. I was then
    terminated by my employer for contacting my coworker, I was told
    I was insubordinate. I believe this was retaliation.

    Is it against the Law for them to tell me I can’t discuss a write up,
    especially if they did it to cover up the fact that they didn’t investigate the matter before initiating a disciplinary action?

  30. Anony

    Is it unlawful for one supervisor (manager) to discuss the salary of his direct reports with another supervisor (manager) for the purpose of fairly compensating the collective team (of both supervisors) at annual raise time?

  31. Lois Ogden

    I was just fired for discussing salary and gossiping. I’m 59 years old and have been with this company for 8 years. Needless to say, I’m devastated. The conversation I had with a coworker only referenced the fact that she was about to loose her bonus pay and I had stated that I had already lost mine. There was no discussion about the amount. The only time I’ve ever discussed an actual amount was with a former coworker on our own time. This coworker later became employed again. I feel confident that these were not the true reasons. I believe they needed to cut a higher paid employee or that the new Manager of the company wanted to get rid of people who had been there longer and hire new people. Out with the old and in with the new. I was also the oldest person working there. My concern is being able to getting another job with comparable income. Do you think I have any recourse? Also, if I request copies of my employment records, does my former employer have to give them to me?

  32. FinanceGuy

    I would love some help with my situation. I currently hold a position in bookkeeping/HR that makes it necessary to know all pay information and thus compensation increases etc. I suspect general pay discrimination and quite possibly gender based. Since the confidential information is something I see out of the innocence of my position, am I protected if I submit a claim to the EEOC based on what I have come across? Thanks!

  33. Luke Bradley (@motleyblogger)

    This is one of many banal, worthless discussions on which we totally waste our time at work and in public forums. The federal government and the NLRB consist largely of idiots. Don’t allow you life to be governed by the arbitrary rules and regulations of bureaucratic idiots. Discuss your pay if you like. Don’t discuss it if you don’t want to. Be prepared to accept the social and legal consequences if you simply cannot bring yourself to keep your mouth shut or your curiosity and envy in check.

Comments are closed.