Wage Discussion Among Your Employees

Does your employee handbook prohibit employees from discussing their salary or bonus with co-workers? Many employers believe there are valid reasons for restricting the disclosure of wage rates and working conditions. For instance, you might worry that such honesty might create unhappy employees and damage employee morale. You may feel that discussion among employees could cause jealousy over or generate uncomfortable situations that require intervention and explanation. This issue is especially pertinent now, since the governor has signed a gender equity pay bill clarifying that “substantially similar” constitutes an equal position.

But did you know that restricting an employee’s ability to discuss wages and/or bonuses is unlawful and exposes you to liability? Labor Code Sections 232 and 232.5 protect the right of employees to discuss both. Moreover, Section 7 of the National Labor Relations Act provides protections for employees to discuss the terms and conditions of their employment. This provision is applicable to both non-union and union employers.

Under the Labor Code, no employer may do any of the following:

• require, as a condition of employment, that an employee refrain from disclosing the amount of his/her wages or information about working conditions;
• require an employee to sign any document denying the employee the right to disclose the amount of his/her wages or working conditions; or
• discharge, formally discipline or otherwise discriminate against an employee for disclosing his/her wages or working conditions.

The intention of this law is not to allow employees to disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege without the consent of his/her employer. Rather, its purpose is to foster and protect the individual right of open, frank, and honest discussion.

With the governor’s recent signing of the SB358 Equal Pay bill, it’s more important than ever that you be aware of the laws regarding wage discussion among your employees. If you have not recently reviewed your employee handbook and company policy in this area, now is the time!

If you have a workforce management issue you’d like to discuss or wish to request an employee, click here or call (714) 993-1900.

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