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Academic Survey: Why Companies Keep Pay a Secret

SmartMoney: “A new study by researchers at the University of California at Berkeley and Princeton University suggests that if all of our salaries were made known tomorrow, half of us would be made miserable and the other half would be made no happier…The University of California finding suggests employers have more to lose than to gain from publicizing salaries. Inexpensive workers might leave and costly ones aren’t made more loyal. That explains why some employers tuck secrecy clauses into their new hire contracts. Such clauses are losing their teeth, however. In the U.S., several states ban them, and in ones that don’t, court decisions suggest enforcement is made difficult if not impossible by Section 7 of the National Labor Rights Act, which protects workers who engage in concerted activity for mutual aid and protection. In the U.K. as of Oct. 1, the Equality Act 2010 bans enforcement in cases where workers are trying to determine whether they’re being discriminated against – something employers would find difficult to disprove.”

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