What to Do When an Employee Tells Other Employees Their Salary
An employee shared their own pay with colleagues and now you have a problem… other employees are upset about the difference, or you are frustrated that compensation information is circulating. Before you respond, you need to understand the legal landscape, because this situation is more legally constrained than most managers realize.
The Legal Reality: This Is Protected Activity
Under the National Labor Relations Act, employees have the explicit right to discuss their wages, hours, and working conditions with coworkers. This is called protected concerted activity and it applies to almost all private-sector employees regardless of company size.
This means:
You cannot discipline the employee for sharing their salary
You cannot tell employees they are not allowed to discuss their pay
You cannot retaliate against the employee in any form for having this conversation
If your employee handbook has a policy prohibiting salary discussions, that policy is illegal and should be removed immediately
An employer who disciplines an employee for discussing their own wages is committing an unfair labor practice under the NLRA, which can result in NLRB charges, reinstatement orders, and back pay obligations.
What You Can Do
You are not powerless in this situation, you just have a narrower lane than you might expect.
You can maintain confidentiality expectations for HR staff and managers who have access to compensation data as part of their job responsibilities. This is a legitimate restriction, and quite frankly, should be communicated explicitly.
You can address the compensation concerns that arise from the disclosure by having honest conversations with affected employees about how compensation is determined
You can use this as an opportunity to evaluate whether your compensation structure is equitable and competitive
Address the Actual Problem
The real issue is almost never that the salary was disclosed, it is that the disclosed salary created a perception of unfairness. Address that perception directly with the affected employees using the approach described in the companion post on handling salary comparisons.
An employee who feels their pay is fair relative to their colleagues does not become destabilized when they learn someone else's salary. The disclosure reveals a compensation equity issue that existed before anyone said anything, and that issue is worth addressing regardless of how it came to light.
Update Your Handbook
If your handbook has language prohibiting salary discussions, remove it now. Replace it with NLRA-compliant language that acknowledges employees' rights to discuss compensation while maintaining appropriate confidentiality expectations for those with HR access.
Our handbook includes NLRA-compliant language on compensation discussions, protecting you from policies that create legal liability while maintaining appropriate confidentiality standards. It comes in an editable Word document + PDF. Instant download. Created by a SHRM-SCP certified HR professional.
Questions about this or other HR topics? Visit pragmatichrgroup.com for more resources.
