State:
September 10, 2024
Q&A: Implement Fair, Transparent Compensation Practices

by Jacob M. Monty

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

Question:    Are there any laws regulating whether managers and supervisors are allowed to know the compensation of the employees they supervise?

Answer:    There’s currently no law that regulates whether managers and supervisors are allowed to know the compensation of the employees they supervise. Employers may therefore implement policies restricting the sharing of this information. However, you cannot restrict employees in nonsupervisory positions from discussing their compensation with their coworkers.

Section 7 of the National Labor Relations Act (NLRA) ensures employees, even in non-union settings, can “engage in other concerted activities” such as the right to discuss wages amongst themselves. Most employees in the private sector are covered under the NLRA. However, the law doesn’t cover government employees, agricultural laborers, independent contractors, or supervisors.

Under the NLRA, the term "supervisor" means any individual having the authority to hire, fire, transfer, suspend, or to effectively recommend such action along with the use of independent judgment. Therefore, supervisors generally cannot assert claims for violations of “concerted activity” rights.

Employers may not want their employees sharing their compensation with their supervisors or their coworkers. However, it would be difficult if not impossible to prevent such information from leaking. In addition, employers may stifle employee morale or create an unwanted narrative of disparate treatment. As a best practice, you should implement clear and consistent compensation guidelines. Being fair and transparent with compensation may incentivize employees to progress with an employer and likewise promote employee retention.

Jacob M. Monty is an attorney with Monty & Ramirez LLP in Houston, Texas. Monty has successfully practiced at the intersection of immigration, labor, and employment laws and is a nationally recognized authority on issues facing employers with large Hispanic workforces. He can be reached at jmonty@montyramirezlaw.com.

Featured Free Resource:
Cost Per Hire Calculator
   
   
 
 
CT-WEB06
Copyright © 2024 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on https://Compensation.BLR.com
Document URL: https://compensation.blr.com/Compensation-news/Compensation/Compensation-Administration/QA-Implement-Fair-Transparent-Compensation-Practic/