Why Do Bosses Want Their Employees’ Salaries to Be Secret?

[xchrom]

http://www.thenation.com/blog/179298/why-do-bosses-want-their-employees-salaries-be-secret



Asking someone at a party how much they make in a year might get you a weird look. Asking someone about their salary at work might get you fired. Seem unfair? Don’t bother complaining: Washington just once again reaffirmed the boss’s inalienable right to punish workers for talking about whether they’re being treated fairly.

In a narrow vote this week, the Senate politely smothered the Paycheck Fairness Act, which would have protected workers’ rights to compare and discuss their wages at work. Aimed at dismantling workplace “pay secrecy” policies, the legislation built on the 2009 Lily Ledbetter Fair Pay Act, which strengthens safeguards for women and other protected groups against wage discrimination. Both measures aim to fill gaps in the enforcement of longstanding civil rights laws, which, half a century on, are still failing to combat the most insidious forms of discrimination—the subtle labor violations that grease the gears of economic inequality. Wage discrimination has persisted in large part because workers are routinely discouraged or outright banned from discussing compensation levels with coworkers.

The Paycheck Fairness Act would have shielded workers from retaliation if they discuss their salaries with coworkers. Employers would have had to “prove that pay disparities exist for legitimate, job-related reasons,” according to the National Partnership for Women & Families. In addition, the bill would have closed disparities in the legal remedies available for violations of the Equal Pay Act, so workers could claim the same kinds of damages provided under other wage discrimination laws. And overall, workers would have had an easier time seeking compensation in federal court, rather than the bureaucracy of the National Labor Relations Board, which tends to yield weaker penalties.

The bill would also have directed the Labor Department and Equal Employment Opportunity Commission to proactively gather data and investigate wage discrimination on a broader scale.

[SheilaT]

1. It's the divide and conquer policy.

I used to work at an airline, and our pay levels were published. If you knew how long someone had been working for the airline (in many of the rank-and-file jobs) you knew what their base pay was. Our actual take-home checks varied depending on overtime or shift differentials or the actual number of hours worked, but you generally knew exactly what your fellow employees made.

I also recall reading sometime during that decade (the 1970's) that where the pay scales were known, employees tended to be much happier about their pay. Because the knew who was making what, and generally knew what it took to make more.

At another airline they not only had the pay steps but "merit pay". It was noticed that the merit pay raises were higher for the men than for the women. There was much more dissatisfaction about the pay at that airline than at ours.

[Gormy Cuss]

5. I worked in a company with an open salary list.

Bonuses weren't public but base pay was. Bonuses tended to be meager for all but the executive level so that was no big deal. We also had no workplace rule prohibiting discussion of wages and bonuses.

It really cut down on a lot of bull. If you thought you were underpaid, you could make the case to your manager at the next review cycle. Very few did because management knew that we all had access to the pay list and the burden was on them to make equitable recommendations for pay raises. I became a manager and saw the process for justifying salary actions -- there were several levels of review to ensure that the raises were appropriate and that people working at similar levels were paid about the same wage. In that regard, it was the best place I've ever worked because as you wrote, we knew who was making what and we knew what it took to make more.

[Igel]

6. That's surely one reason.

But where I work the base pay is accessible to anybody on the Internet.

That's not what individuals make. There's a "merit" component. Do a good job, and you're at the top of the range. Do a sucky job and you're at the bottom. Some is favoritism, but a lot really is "quality of work." You want to have your coworker say he makes $5k/yr more than you and then ask you what you make? If you're at the bottom your answer says, "I'm a sucky worker."

No, it's not always clear. Yes, a lot of times given how we're evaluated the evaluations are disconnected from reality. People would be very upset.

Then there's a group of people who do more or less specialized jobs. They have an added amount to their salary.

And there's another group who do work not covered by their contract. It's not that we're prohibited from talking about our salaries (as far as I know) it's just that we don't.


In other jobs it was clear that more recent hires might get more or less money for what appears to be the same job. I was resented for a year by my coworker who did payroll. She'd worked there for years. I was a new hire. I got a higher salary. Eventually a lot more was dumped on me and, after she quit, I did her job and my job.

At the same place another employee got 40% more, primarily because he was married with kids. This struck the single folk as unreasonable. However the boss was clear on the point: he paid not just according to your work, but also according to your needs. Single living at home? 26 and single and not at home? 40 and married? In fact, the "married with kids" guy had a higher salary than our boss. This, however, was to be a secret--I only knew because, as I said, I wound up taking over payroll duties.

Lots of reasons. Big corporations may have one reason (or each may have a slightly different one). Simplifying makes for good sound bites. Which, as we all know, is actly how we get an informed electorate--reducing everything to a single answer that can be wedged into 15 seconds.

[SharonAnn]

2. People don't hide their actions in the dark in order to do good things.

[erronis]

15. Like this!

[leftstreet]

3. DURec

[tularetom]

4. It's a joke but the bosses are usually to dumb to realize it

My sister was a secretary at a law firm that had that policy. Officially, no one was supposed to know what anybody else made, but the entire clerical and support staff did. The lower level associates eventually joined up with them, and finally it was only the partners who believed in the policy.

Most of the worker bees went out for drinks after work, so anybody who believed they weren't talking about working conditions (including of course, pay) was either delusional or very naive.

[Major Nikon]

21. The problem comes in when you try to take action based on that knowledge

Because in doing so you've just disclosed you're in violation of the company's policy. It's really nothing more than an employer intimidation tactic.

[Swede Atlanta]

7. Actually I think the relationship between employer and employee should be private........

Except when represented by a union, each employee has a separate and distinct relationship with the employer. In some countries, notably especially in Europe, these are often in the form of a contract whereas in the U.S. most employees are "at will".

But the terms of that agreement, including compensation, should be consistent with company policies such as vacation, etc. and a general range based on the grade of the employee, should be private.

[Logical]

9. I 100% agree. nt

[eggplant]

29. I think that when it comes to the privacy of the information...

...that I have the right to discuss anything personally related to me, including my salary, reviews, rankings, and so on. And if I don't want to, that's my choice as well, unless the employer mandates open records -- in which case, let's all see everything.

The idea that my employer gets to dictate who can see my paystub is simply absurd.

[Atman]

8. Some employees aren't too bright.

I worked next to a guy who applied for a second mortgage. We had offices (not cubicles) but no ceilings, as it was in an old mill building with 15' high ceilings. Dude gave all his salary information over the phone. I heard about every dime he made. At first I was pissed...I found out he made more than me in base salary for the same job. But then I found out I made a huge amount in bonus compared to him, so my annual pay was actually a lot more than his. I can't really jump on the "pay equity" bandwagon. I like it as a concept, but employers tend to know who their good employees are. I had a lower base salary, but more than made up for it in bonuses. The boss tends to know who is lifting the heavy loads. Of course, this is a lot different if you're working at McDonald's.

[JackInGreen]

11. Glad that was your individual experience

but I somehow doubt it applies to the gross majority of the working poor considering most of them aren't even in the neighborhood of applying for a FIRST mortgage.

[daleanime]

17. What is this "bonus" that you speak of?

[Atman]

19. A salaried job.

I see Walmart commercials with "associates" saying they get paid "bonuses." I understand that it is just marketing hype. But I really did make bonuses that were higher than most Walmart worker's annual salaries. Yet the Walton billionaires can't find the money to pay their employees decent wages. Of course, Walmart suck so bad that their employees are probably paid just enough.

[Vashta Nerada]

36. Walmart associates do get quarterly bonuses, up to $500, but it all depends on a number of factors.

The overall customer experience is the main driving force behind the quarterly bonuses. You know those surveys that get printed out on receipts? If you ever do one of those, it affects the associates' bonus, good or bad, depending upon how the customer responds to it. Other factors into quarterly bonuses include: the amount of overstock freight in back (associates have no control over this, yet it affects their bonuses), the amount of empty spaces on the shelves, and even the cleanliness of the store. The bonus varies from store to store, and associates never get the whole $500. I've seen, at most, a quarterly bonus of ~$250. However, management will always get the full amount for their bonus, no matter how crappy the store may be.

[LibDemAlways]

10. I worked in what was then called the personnel dept. of

a privately owned insurance co. back in the early 80s. I was privy to everyone's salary and am confident the info was kept under wraps so the employees would have no idea of just how wide the wage disparity was between them and the bosses. The two guys at the top pulled in 30k a month plus million dollar bonuses yearly. Managers made 10k a month minimum plus bonuses of 25 to 50k a year for sitting in their offices not doing much of anything as far as I could tell. Ordinary workers, the bread and butter of the company, were lucky to work their way up to 1k a month from minimum wage to start and were never even considered for a bonus of any kind.

Had the peons known what was going on, it would have been horrible for morale -which was already low. After a year without a day off, I said screw it and left.

[kiawah]

12. "I said screw it and left"... there you go

Unhappy with your pay, manager, company policies, co-workers.... whatever? Screw it and leave. But, for God's sake, quite bitching about it!

[xchrom]

14. what an interesting comment. nt

[LibDemAlways]

16. Since I worked for the company

30 years ago and was relating the circumstances that existed then and why I believed salary info was kept confidential, I wouldn't call my post "bitching" .... but whatever. Yep, interesting take on it.

[warrprayer]

26. that it is. n/t

[socialist_n_TN]

18. And the "company man (woman?)" contingent is heard from.........

Let that boss try to run the company without workers. I feel quite sure the workers could run the company without the bosses. The reverse is NEVER true.

And practically for the most part, you can get away with this ONLY when there's enough jobs out there to make another job search viable. Of course, then the bosses bitch about how "disloyal" workers are. As has always been the case under capitalism, it's a rigged game, rigged to the benefit of the owners.

[Tom Ripley]

23. Are you for real?

[marmar]

13. k/r

[joanbarnes]

20. This was never a problem all the years I was in a Union! Clear, published contract wage scales.

[laundry_queen]

22. This aggravates me so much.

My mom's company does this. My brother works for the same company.

In most ways it's a really good company to work for - stock options, performance bonuses, profit sharing...

My mom was very thankful that they took over her company - the profit sharing and bonuses mean she gets to retire a few years earlier than planned.

But, they won't let anyone talk about pay, or they are instantly fired. It's in their contract. My mom and brother can't even talk about how much they make or what percent they get for profit sharing because if someone found out they talked about it - they would be fired.

I told my mom, "you know the only reason they would do that is to keep the employees from wanting higher pay, don't you think that is underhanded?"
But my mom isn't one to raise a stink, and she is well paid, so she doesn't say anything. Meanwhile, her bosses are likely pulling in millions (you can tell by their lifestyle).

Only companies that have something to hide do this, IMO. Usually they want to hide just how much bosses are paid, because if the bottom rung employees knew, there would be a revolt. So, if your company has this policy - they are probably ripping you off.

[B2G]

24. What I make is nobody's damn business

My company has salary scales for each position.

They vary widely, but you have to be somewhere on the scale. If you're in the bottom 25%, you get a larger annual increase than those at the top 75% (if you perform at an acceptable level). They are based on market data and your geographic location.

Where you fall on that scale is determined by experience and job performance.

[moriah]

27. But if you CHOOSE to allow it to be somebody's business, why on earth should that get you fired? n/t

[DaveJ]

28. Consider this...

Say, hypothetically, you were making $150k and someone next to you is doing the same thing making $30k and struggling. Isn't it a little insensitive to say to that person 'what I make is none of your damn business'?

You say your company pays fairly and perhaps that is true. Not every company does pay fairly, and this is what the concern is.

[B2G]

31. If the wage difference is that wildly different

they already know they're being screwed. I don't see how using my personal data for leverage is a reasonable solution.

There is fair market wage data all over the internet. I suggest they use that to assess the fairness of their pay, not the salaries of their coworkers.

[OriginalGeek]

35. "Fair market wage data"

I'm a big fan of that. About 7 years ago the company I work for (a large not-for-profit) hired a new CIO. The first thing she did was review our salaries and compare them to fair market wage data for our industry and IT in general. Found out we were making roughly half of what our counterparts in the private sector were making. My salary nearly doubled overnight.

I love that woman to this day even though she retired and is no longer our boss. She could call me up right now and I would literally do anything she asked from help program her DVR to bury the bodies.

[DaveJ]

25. What a shame this didn't pass

I know people will say ' you're on your employer's time ' but I still believe that spirit of free speech should be extended to every facet of life.

It's perfectly reasonable to know what your coworkers get paid. I worked with a guy and for 5 years walked him through every step of his job, day after day. Eventually I found out he was getting paid $20k more than me, so I left. If I'd known earlier, I would have left sooner.

I don't think this is a woman's issue, it's a common sense issue. The purpose of a business is to be productive and make money. If pay is disproportional to the work being performed then it hurts both the underpaid and the company. Besides, people's right to speech should not be imposed on, in my opinion. Even if it's legally ok, it's not right to control people in that way.

[yallerdawg]

30. Secret salaries

I would think for most comparable salary positions, all things being equal, the employer doesn't want you disclosing your pay because there are disparities.

Like your female counterpart makes less, all things being equal.

"Women don't negotiate well" does not address fairness and equality in the work place.

My employers have always known just how high they can go - the job has a maximum value. Where they maximize profit is coming in under these values, and they don't want people coming to them 'collectively' asking why the discrepancy.

Is it still prevalent in the work place?

Did republican'ts just kill the Paycheck Fairness Act? Who do they serve?

[CrispyQ]

32. Favoritism. This way they can pay their favorites more, even if their quality of work is less.

I've seen it in every job I've ever had except for the union where your wage was based on which position you held & how many hours you had worked it. Also, in the union, not only do all employees know your wage, the public does too.

[Android3.14]

33. Here's a couple of the reasons

First off, at my company, I pay everyone what I would be willing to take to do the job they do, which at this point means that everyone in my company receives the same wage, including me, $12/hour. I don't have a policy about talking about wages, though I considered it for about 5 seconds when I ran across that advice as I was researching how to manage a company.
That being said, I cannot think of a bigger waste of company time than having employees griping to each other about wages. My in-between-jobs job has been making and/or delivering pizza. And I remember the occasional bitch sessions we'd have while on the job in which someone would be unhappy that someone else received a raise, or that someone had a day off when another person did not.
During company time, it is a waste of human resources. It's a complete downer with the other workers, people will become pissed off without knowing all the reasons a person might receive the pay he or she earns, and finally, people will lie about what they make.
I am not saying these are adequate reasons. They are not, especially if there is an abuse of some sort occurring, but they are some of the reasons that people who do have this sort of company policy use to justify the practice.

[Skittles]

34. so they can pay the men more