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 terminology 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 unde ...

, 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. A 2024 experiment conducted on employees at an Asian bank showed that revealing salaries of their managers, especially to those who predicted it lower than actual, led the employees to become more productive.

Compensation transparency by country

Canada

Under

Ontario Ontario is the southernmost Provinces and territories of Canada, province of Canada. Located in Central Canada, Ontario is the Population of Canada by province and territory, country's most populous province. As of the 2021 Canadian census, it ...

Employment Standards Act The ''Employment Standards Act, 2000'' (the Act) is an Act of the Legislative Assembly of Ontario. The Act regulates employment in the province of Ontario, including wages, maximum work hours, overtime, vacation, and leaves of absence. It diff ...

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 United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

, the

Equality Act 2010 The Equality Act 2010 (c. 15) is an act of Parliament of the United Kingdom passed during the Brown ministry with the primary purpose of consolidating, updating and supplementing the numerous prior Acts and Regulations, that formed the basis o ...

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, an ...

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, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

New York New York most commonly refers to: * New York (state), a state in the northeastern United States * New York City, the most populous city in the United States, located in the state of New York New York may also refer to: Places United Kingdom * ...

enacted a pay transparency law in 2023. The law requires employers to publicly disclose job salary ranges. Massachusetts enacted a pay transparency law in July, 2024, which applies to businesses with more than 24 employees, with data reporting for businesses with 100 or more employees.

Maryland Maryland ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic region of the United States. It borders the states of Virginia to its south, West Virginia to its west, Pennsylvania to its north, and Delaware to its east ...

'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".

References

Labor rights Transparency (behavior) Wages and salaries {{econ-stub