Secrecy about pay and pay practices not only masks gender and racial pay gaps, it perpetuates them. Because pay often is cloaked in secrecy, when a discriminatory salary decision is made, it is seldom as obvious to an affected employee as a termination or a denial of a promotion. Cultural norms around pay secrecy remain strong and many workers are fearful of questioning the validity of their pay due to workplace power dynamics or threat of retaliation, given that many employers explicitly prohibit or discourage discussion of pay. As a result, employees often have no idea they are being discriminated against and, even if they suspect discrimination, face significant obstacles in gathering the information that would indicate they have experienced pay discrimination, undermining their ability to challenge such discrimination.
In short, pay secrecy allows unjustified pay gaps to grow in the shadows, undetected.
In 2016, the Equal Employment Opportunity Commission (EEOC) announced changes to the EEO-1, a form it has used for decades to annually collect workforce demographic information from employers with 100 or more employees. This pay data would have given the EEOC an invaluable tool to fight pay discrimination by helping the agency identify firms with racial or gender pay gaps within each job category that significantly diverge from their industry and regional peers, for potential further assessment. Companies were scheduled to submit the data beginning in March 2018, but in 2017 the Trump Administration halted the pay data collection, subjecting it to a largely unexplained “review and stay.” While federal efforts to promote pay transparency in the United States have stalled, leading to a legal challenge, international efforts to require employers to report about their pay data suggest creative approaches that can inspire U.S. policy makers.