You likely know too much about your co-workers: their family dramas and what they eat for lunch. But you probably don't know what they earn.
Pay secrecy is a concept that covers everything from employment contract clauses that explicitly stop you telling co-workers what you earn — or asking them what they do — through to cultures of secrecy around bonuses, starting salaries and remuneration packages.
"Pay secrecy is about the information that employers might provide to employees," Michelle Brown, professor of human resource management at the University of Melbourne, says.
There's a lack of hard data about pay secrecy due to the very nature of the issue.
But websites such as Glassdoor and Payscale are busting through that with anonymous submissions posting deep, granular information about how much people earn in specific roles inside named companies.
Studies comparing the data on Glassdoor with that collected by the US Bureau of Labor Statistics found a very close relationship.
"Meaning people are actually putting accurate information into those databases," Professor Brown says.
"People will access it because what we see is there's a trend amongst employees asking for more and more transparency."
An Australian issue
If you've seen job ads, or applied for a role without knowing the wage, you'll be aware of the pervasive nature of the problem.
"Pay secrecy is a feature of Australia's workplace relations system, common in a lot of workplaces," says Alison Pennington, senior economist with the Centre for Future Work at the Australia Institute.
"It's uncommon in lots of workplaces across the world," she adds, "but it's popular with employers in Australia because it prevents the free sharing of information that employees need to know, to know where they stand in relation to each other and to effectively bargain to get a higher pay increase."
Ms Pennington argues pay secrecy holds down wages and research shows the impact is felt disproportionately by women.
That's because women face more barriers to participation in work, Ms Pennington explains, and are more likely to undervalue their skills and their contributions in discussions around pay.
Stubborn gender pay gap
The Workplace Gender Equality Agency (WGEA) is a government agency that aims to promote and improve gender equality in Australian workplaces.
It doesn't take a firm view on whether pay secrecy helps or hinders employees, but a recent submission takes the temperature of academic research.
Quoting a study from researchers at King's College London, it describes the level of transparency in Australia's gender equality reporting as "medium".
In a 2015 submission to an inquiry about amending laws to help cut the gender pay gap, it said:
"The research evidence from Australia, the US and the EU suggests that pay secrecy may contribute to the gender pay gap," it continued.
However, the submission did go on to say pay secrecy was a factor preventing equal pay for equal work, could "lead to problems in the employment relationship" and that greater pay transparency contributed to an environment where women were better equipped when negotiating pay.
“Pay secrecy means that employees do not have full information about their colleagues' pay; such as formal base salary levels, salary structures, and informal remuneration salary components," it says.
Booted for talking
A former Commonwealth Bank lender is taking the institution to the Fair Work Commission, accusing the nation's biggest bank of breaching his workplace rights by sacking him, in part because he allegedly discussed overtime and penalty rates with colleagues.
The letter dismissing the lender outlined several reasons for the sacking, a few days before his six-month probation period was ending, including "unacceptable conduct" and "discussing confidential remuneration with colleagues".
At the time, national secretary of the Finance Sector Union (FSU) Julia Angrisano said pay secrecy clauses "lined the pockets" of employers.
"Draconian clauses that prohibit employees from disclosing their remuneration to their colleagues under threat of sacking create environments in which the gender pay gap continues to exist and other inequalities are hidden and therefore cannot be addressed," she told a newspaper.
"CBA should prioritise fairness and genuine engagement over fear and the threat of termination when setting the salaries of their employees."
In a statement, Commonwealth Bank said the former staff member's employment was "terminated prior to the end of his probation period for a range of different conduct and performance issues".
The bank said it was committed to gender pay equity
"We review pay equity throughout the year as well as part of our annual remuneration review process," the statement said.
"We also support transparency around pay decisions to ensure our people understand the considerations taken into account to make fair and consistent pay decisions."
The bank is reviewing pay secrecy clauses in its employment contracts. It's the only "Big Four" bank that hasn't committed to removing the clauses.
"As a matter of practice our employment contracts include a standard confidentiality clause covering a range of information including the specific terms and conditions of an individual's working relationship with us," the bank said.
"We have been progressing with our review, including whether these clauses continue to apply to remuneration."
Finance sector problem
Financial services is a sector with a feminised workforce and highly individualised pay systems, including performance bonuses and carrying commission rates.
The Australia Institute’s Centre for Future Work researched pay gaps in the financial sector for the FSU. Its report estimated the gender pay gap at the bank results in reduced compensation for women working there of close to half a billion dollars each year, and potentially up to $800 million.
The bank has not seen the report because it has only been released this morning. The calculation was based on data from the bank’s annual report, the Australian Bureau of Statistics and the WGEA.
“The finance industry is actually one of the worst-performing industries for the gender pay gap,” she said, “because they have high rates of bonuses and informal sidebar types of compensation of which women are less likely to be offered”.
Anonymous staff members disclosed that they had risked dismissal to discuss their pay with colleagues – and many reported discovering new starters were often paid more than their more experienced colleagues.
“Research points to the higher levels of cohesion that are created in environments where people know where they stand in relation to each other,” she said. It's far more damaging to productivity and cohesion in a workplace if people fear talking to each other. Silence is not good for productivity.”
Secrecy ban promised
The Labor Party has said it will prohibit pay secrecy clauses and give employees the right to disclose their pay to colleagues if they want to.
“This will promote pay transparency and make sure workers are protected from adverse action if they exercise their right to disclose (or not disclose) their pay,” the policy reads. “Pay secrecy clauses are a significant constraint to employees bargaining for pay rises. In the public sector where pay rates are transparent, the gender pay gap is smaller than in the private sector.”
In 2016 a Greens-initiated bill tried to amend the Fair Work Act to allow workers to discuss their pay, but it failed to pass.
Industrial relations minister Michaelia Cash said via a spokesman that the Morrison government was committed to women's employment and there were more women in full-time work than ever before.
"The Morrison government takes the issue of pay parity very seriously and has mechanisms in place to provide for pay transparency and address the gender pay gap," the spokesman said.
"It is unlawful to pay a man and a woman differently for the same job on the basis of their gender.
"The inclusion of pay secrecy clauses in employment contracts is a matter for the contracting parties."
The spokesman added that some representatives of employers were concerned that banning pay secrecy clauses would harm business competitiveness, especially if workers could not be stopped from discussing wages, because it could "undermine the ability of organisations to manage workplace performance".
Leading business groups were also contacted for comment.
Business not convinced
At the time of the Labor Party's announcement, Business Council of Australia chief executive Jennifer Westacott was unconvinced by the merits of scrapping pay secrecy clauses — and any impact it would have on the gender pay gap.
"Is me telling you how my pay is structured going to solve the systemic problem about the whole issue of pipelines and training and recruitment and development and the way management positions are described? The way attributes are given to leadership positions?" she asked The Business host Elysse Morgan in September 2018.
"Those are the issues that serious research has shown that's what you've got to fix.
"We have to fix some of these problems ... simply naming and shaming companies and doing a few things around the edges is not going to fix a very systemic problem."
More transparency coming
Even without changing laws, Professor Brown feels change is coming. Transparency is being forced by tech-company ethos and websites like the ones mentioned earlier, and younger employees don’t feel compelled to keep quiet.
And if people don’t know what their colleagues earn, they guess anyway.
“They go and seek it in other places. Employees will go and look at the positional goods (luxury items) of their colleagues. They'll look at where you live, how you live, where you send your kids to school, and they'll make assumptions about what you get paid on the basis of what they see,” she says.
