How much do your co-workers earn?

Caitlin O’Toole

When it comes to workplace taboos, forget religion, politics or sex. Instead, think salary.

While the pay of civil servants or highly paid executives is made public, most workers have only a vague notion of what their colleagues earn.

A survey by career networking site LinkMe found that 52 per cent of people want transparent pay in their workplace. And half admit to lying about pay to co-workers, and almost one in four has found out what their fellow workers earn.

So why is pay such a taboo topic? Businesses discourage workers from discussing pay, worried that employees will become resentful over pay differences, demand raises or quit in anger.

Many employees are now contractually forbidden from talking about their pay, which can lead to a dilemma if you discover you are being paid less than a coworker.

Mallesons workplace lawyer Andrew Gray has seen cases where employees are fired for revealing their salary.

“There’s two concerns,” said Mr Gray.

“Some employers regard the information as confidential and they don’t want it leaked outside the firm. But also, they don’t want the disruption inside the workplace. In my experience the internal disruption has been the main thing that has concerned employers.”

Professional services firms, which rely on teamwork and attracting top talent, are especially touchy, cracking down on salary talk as causing unrest and disruption.

Sackable offence

If your contract doesn’t allow you to discuss salary with your co-workers, then you legally are bound by that agreement. That means if you try to negotiate a raise and mention you are being paid less than a co-worker in a similar role, you can get yourself and your co-worker in trouble, or even fired.

Joseph Kelly, national legal officer for the Association of Professional Engineers, Scientists & Managers Australia (APESMA) says they often get distressed calls from workers who have discovered they are earning less than a co-worker, but are bound by a contract that forbids them from talking about salary.

“There’s not a lot they can do,” said Mr Kelly.

In one case, a female architect who had been at a firm for ten years found out a male co-worker with just five years of experience earned more than she did. The pay gap only came to light when she noticed her company billed a client at a much higher rate for her less experienced colleague.

“The reason she called was to say ‘Can I raise that in trying to leverage a better outcome for myself?’, said Mr Kelly.

“Looking at the clause of her contract, well no, she wasn’t supposed to discuss it.”

All loyalty to the company gone, the architect was so angry she resigned.

While a quarter of employees admit to snooping to try to find out what co-workers earn, sometimes pay differences come to light by accident. A payslip left on the printer, a human resources error, flashy spending by a co-worker or access to perks like a company car or parking spot, can signal pay differences.

Of course, legitimate pay differences can arise based on job title, productivity or experience. But pay gaps can also result from internal office politics, favouritism or differences in bargaining style.

Why it’s secret

Keeping pay discussions in the office to a minimum saves managers from having awkward discussions about why an employee is earning less, and eliminates a potential source of friction at work.

Mr Kelly says secrecy around pay helps keep wages down, and discourages collective bargaining. Some employers are just paranoid about controlling information, he says, while others see a clear cost advantage. Others just don’t want to deal with irate employees and salary demands.

“If employers can limit the kind of complaints they hear from employees, the better,” says Mr Kelly.

But employers who keep a lid on salary information may just be encouraging their workers to leave.

If employees can’t find out from their workplace how they stack up salary wise, they’ll start measuring themselves by what the competition pays – and could be tempted to jump ship.

“Where there is an absence of that clarity, they want to know where they sit in the market,” said Mr Kelly.

“If you can’t find that out with your employer, you’re going on a website trying to work out your value. At some point, it’s easier to say ‘stuff it’ and go work for someone else.”

Pay transparency means business would know what their competitors are paying, and adjust their payrolls so they don’t have to worry about staff being poached by higher-paying competitors.

And instead of causing divisiness, openness about pay can actually reassure employees of how their worth is valued, especially if employees can see a clear career and salary progression ahead of them.

“I think you can get around a few of the retention issues if you provided clear career progression,” says Mr Kelly.

Women disadvantaged

The taboo around discussing salary or pay at work especially disadvantages women workers, say experts.

To mark Equal Pay Day, the Equal Opportunity for Women in the Workplace Agency urged businesses to review their pay arrangements and introduce greater pay transparency.

The Australian COuncil of Trade Unions has also called on the Federal Government to force businesses to register pay details by gender, to ensure businesses are paying workers equally.