Regulating for Pay Transparency: Can Law Overcome Workplace Secrecy?

Abstract

Evidence that gender-based pay inequity is higher when pay is secret has led governments to prohibit pay secrecy clauses and give employees the right to discuss and disclose their pay. However, the effectiveness of regulations prohibiting pay secrecy may be constrained by social and organisational norms that preclude discussion of pay, including employee fears of the implications of pay transparency. This article provides insights from interviews with 32 employees and managers from a large Australian financial services company, revealing that perceptions of pay transparency are shaped by organisational rules, social norms, trust in the employing organisation, and fear of the repercussions of knowing pay is unequal. The implications for the effectiveness of the pay transparency measures in the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) are discussed.