Wage transparency, salary compensation, and compensation transparency generally, involves disclosure of employee compensation amounts, either among other employees in an organization, to owners, to government regulators, or to the public.
Some jurisdictions have
pay transparency laws intended to prevent discrimination based on demographics like gender or race. These laws require job listings to give a salary range for the position. To eliminate unintentional discrimination and treat employees more ethically, some organizations have adopted
radical transparency
Radical transparency is a phrase used across fields of governance, politics, software design and business to describe actions and approaches that radically increase the openness of organizational process and data. Its usage was originally understoo ...
, disclosing all employees' compensation internally and either equalizing pay for similar positions or justifying differences.
Some jurisdictions mandate
disclosure of executive compensation to shareholders, in an attempt to reduce excessive compensation.
According to a 2024 review of existing evidence, pay transparency within a firm tends to narrow coworker wage gaps, but also incentivizes employers to bargain more aggressively to keep average wages down. Within-firm pay transparency also reveals to workers pay differences across different levels of seniority, which "can lead to more accurate and more optimistic beliefs about earnings potential, increasing employee motivation and productivity." Cross-firm pay transparency overall strengthens the power of workers against employers, as workers are more likely to seek higher-paying jobs, and negotiate higher pay at their current job.
Compensation transparency by country
Canada
Under
Ontario's
Employment Standards Act it is illegal for an employer to "intimidate, dismiss or otherwise penalize an employee or threaten to do so" because the worker has disclosed their own wages or because the worker has inquired about the wages of another worker for the purposes of determining the employer's compliance with the law's Equal Pay for Equal Work provisions.
United Kingdom
In the
United Kingdom, the
Equality Act 2010 protects the rights of workers to discuss pay and forbids employers from prohibiting a worker's "relevant pay disclosure".
United States
Federal law
In the United States, the
National Labor Relations Act
The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
protects the right of employees to discuss compensation without retaliation from their employer.
By state or territory
California, Connecticut, Hawaii, Illinois, Maryland, New York, Nevada, Rhode Island, and Washington have passed compensation transparency laws as of 2023. Some US cities also have compensation transparency laws, including
New York City.
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
enacted a pay transparency law in 2023. The law requires employers to publicly disclose job salary ranges.
's Equal Pay for Equal Work law states that "an employer may not prohibit an employee from inquiring about, discussing, or disclosing the wages of an employee or another employee".
See also
*
References
Labor rights
Transparency (behavior)
Wages and salaries
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