Total Compensation Transparency Gets a Federal Boost

Human resources documents: payroll salary and employee time sheets place on office table with cup of coffee and calculator sepia tone

 

Salary transparency – making total compensation and pay packages public – has increasingly gained momentum. While most businesses might not even consider implementing such a policy, certain events have pushed the idea forward.

At the federal level, the stigma of total compensation transparency has received an overhaul. Due to the recent Executive Order 13665, federal employees can no longer be fired or be punished for discussing their pay or their coworkers’ pay. The rule applies to federal contracts and subcontracts that exceed $10,000 in value.

In the tech industry, many smaller companies already engage in total comp transparency. According to Laszlo Bock, Google’s “people operations” head, smaller companies (fewer than 300 employees) will often make pay public because it helps reduce pay discrimination; it’s an easy policy to implement and can help explain differences in pay. At larger companies, however, those clear differentiations start to get hazy.

Yet, pay transparency doesn’t always improve working conditions. Seattle CEO Dan Price of Gravity Payments suffered some employee backlash when he raised the minimum salary for all company employees to $70,000 a year. Some of Price’s employees felt the raise was unjust because they saw individuals were doing little to no work for the same paycheck. Whether the move will work out for the Seattle-based company remains to be seen, although Gravity Payments is expected to recoup their losses by next year, according to “Fast Company”.

Will the movement for total compensation transparency continue, or will the idea behind it fizzle out? Let us know what you think.