What is Salary Transparency and Which Companies Practice it?
Salary transparency has been a hot-button issue for women for the better part of the 21st century. Until very recently, it took detective work or the willingness to ask uncomfortable questions for women to find out whether they were being paid the same as others doing their same job.
Not sure if your company promotes salary transparency? Check your employee handbook or website for the official company policy, or ask your human resources department. If you still can’t find anything, your company likely does not actively promote salary transparency.
Read on for our answers to five key questions about salary transparency to help you understand the issue and how it may be impacting you:
1. What is salary transparency?
Salary transparency allows employees to have open knowledge of, and discussion about, how much all employees earn. The employer is transparent about the amount of money and benefits its employees receive and allows this data to be made available to workers within the company. But salary transparency doesn’t necessarily mean that you would know what your colleague makes specifically. While some companies bring salary transparency to that level, most provide the data based on job title or simply by grouping employees into wage brackets.
2. Are employees asking for salary transparency?
In companies that have experimented with pay transparency, research suggests that employees are more productive and satisfied with their work and collaborate better. More importantly, pay transparency could help close the wage gap between women and men, especially for women of color. When companies are transparent about pay, it helps all employees negotiate for pay equity.
3. Why do employers discourage salary transparency?
Despite potentially positive benefits to both employees and the company, most workplace cultures still largely discourage discussion and inquiries of pay. In fact, being open about your salary is your protected right: Actively prohibiting, punishing, or discriminating against employees who do discuss pay is illegal for employers under federal law. Employers may fear that having open dialogues about pay can make the workplace even trickier to navigate, or they may worry that salary transparency means they’ll have to pay higher salaries overall.
4. What types of companies have embraced salary transparency?
Very few companies have fully implemented salary transparency. Whole Foods Market (now owned by Amazon), social media management tool, Buffer, and New York-based startup, SumAll, are among them. While some companies, such as McKinsey and Company and Trader Joe’s, may encourage pay transparency or foster an environment in which discussing pay is less uncomfortable, they still do not fully disclose pay, which involves publishing pay ranges and actual salary amounts by specific groups of people.
5. Which jobs are the most pay transparent?
When it comes to pay transparency around specific job titles, you’ll find that if you work in sales and are paid on commission, the pay formula is generally known and transparent. If you are in a union, your pay may be public under collective bargaining. However, if your job title doesn’t include sales, and you’re not a union worker and your company isn’t one of those listed above, it may be tougher to get information about how your company pays its employees. Look for data within your company’s internal website.
While your employer is required by the Department of Labor to disclose pay transparency protections in the company handbook, this only prohibits your boss from punishing you for discussing salary and does not reinforce pay transparency. Check company policy or ask HR; if you still can’t find anything, your company likely does not actively promote salary transparency.
