What is a Salary Disclosure?

Salary disclosure may have two to three discrete definitions. It can mean an employer being required by a state, country or city agency to give information about what certain employees are paid, usually executive employees. Another definition of this term is about prospective employees, who may be asked in job interview what their current salary is, and might wonder if they should disclose it. Additionally, salary disclosure could refer to one employee telling another how much he/she makes: a practice that may be discouraged by some employers.

The first definition of salary disclosure is the most common one. Many cities, states or countries have rules about what salary information must be made available. Often, this affects those who hold public jobs but the precise salary amount many only need to be disclosed if people make above a certain amount of money. Private companies or non-profit agencies can have salary disclosure rules too, and they may need to disclose to the public or at least to board members the total amount any executives are paid.

A heated debate can exist about the need to follow salary disclosure guidelines or rules. An individual who has his or her salary disclosed may feel that privacy is being violated. Others argue that such disclosure is important because it makes it clear what level of compensation executives have and whether this is reasonable or in excess. In other words, it may keep executives or higher paid employees from receiving too much pay.

The issue of receiving pay certainly relates to the prospective employee who is trying to get a job. Many fear that disclosing low salary amounts in previous jobs might mean they are hired at lower than normal amounts at new jobs to which they apply. It is important not to lie about previous salary if asked this question by an interviewer, but there are means of spinning the question so that expectation of a higher salary is clear. If asked, people can simply state their previous salary amounts, and then say something like, “That’s one of the reasons why the job was not a good fit for me.” Also, people should research the salaries that are average in the job for which they apply and use this information when it comes to requesting a salary.

Some companies may discourage salary disclosure by one employee to another. It’s nevertheless a common practice, and employees comparing each other’s pay may be of some use. People like Betty Ledbetter, who did not find out she was being underpaid significantly for numerous years, was unable to take action and file a discrimination suit until the Supreme Court deemed the suit was too late. Her experience, brought to national attention in 2008, perhaps encourages employee-to-employee salary disclosure as a means of checking pay equity. However, not all employees may be paid exactly the same, and one concern employers may have is justifying differences in pay if two employees are not equal in performance. Employers sometimes feel that discussion of salaries can foment tension, jealousy and poor feelings in the workplace.