It is common knowledge that it is illegal to pay women less than men for equivalent work. The federal Equal Pay Act of 1963 is over fifty years old, but despite its ban on unequal wages between genders, an 18% wage differential still exists, explain the authors of a new study on pay secrecy.
Visibility to compensation levels
The study’s authors cite to research suggesting that when people working together within an organization have knowledge of the pay levels of those with whom they work, the pay differential between genders narrows.
Obviously, if a female employee does not know what her male counterparts earn, she would not have the information necessary to challenge unequal pay or negotiate fair compensation. For this reason, it is not unusual for employers to forbid employees from discussing their salaries amongst themselves, preventing people from learning about potentially illegal earnings gaps between genders.
While federal labor law has long included protections for employees who want to share wage information, it has been largely ineffective due to loopholes and insignificant penalties for violations, say the researchers. And even though several states have adopted pay transparency laws to protect workers, the recent study (based on employee survey data) shows that while the prevalence of formal wage secrecy policies has slightly decreased in private employment, informal encouragement of pay secrecy is on the rise.
Some of the study’s main findings include:
- Almost half of surveyed full-time employees said they were either subject to formal pay secrecy policies or discouraged from talking about compensation levels with others.
- Almost 10% of those surveyed (including those in states that ban pay secrecy) said their employers had formal pay secrecy requirements.
- Female workers are more often subject to pay secrecy policies and are more likely to violate them.
New York Labor Law protects pay equity and prohibits pay secrecy
New York’s equal pay statute prohibits unequal pay for “equal work” or “substantially similar work” between someone in a listed protected class and another worker outside the class. (Protected classes include sex, sexual orientation, gender identity or expression, and several others in a comparatively comprehensive group) Only four exceptions can legally justify such a wage gap:
- Merit system
- Earnings based on production quality or quantity
- In designated circumstances, a “bona fide factor” like “education, training, or experience”
The law also prohibits an employer from banning an employee from “inquiring about, discussing, or disclosing the wages of such employee or another employee.” The employer may, however, establish a written policy of legal, reasonable limits on discussions about wages regarding time, place and manner. Of course, no employee is required to disclose earnings information to a colleague and the law likely prohibits some employees like those in payroll or human resources from sharing this information to which they have access as part of their jobs.
Learn about your options
Even if employers are slow to comply, pay secrecy is illegal in New York and employers may not retaliate against employees who exercise their right to discuss compensation. A lawyer can explain your rights and can provide information on what potential legal remedies exist for employer retaliation.