Pay secrecy clause

There’s no general implied term that employees must keep details of their salary confidential. So if maintaining confidentiality of salary and benefits information is important, you need an express contractual clause to cover the point. Be aware though of the Equality Act exception to the enforcement of pay secrecy clauses.

Express clause needed

You can’t simply assume your staff are obliged to keep salary details confidential, whether this is their own salary or information they learn about the salary of other employees, as there is no general implied term that pay is to be kept confidential. If it’s important to you that staff keep salary (and benefits) information confidential, you should set that out expressly in your contractual terms. This is where our Pay Secrecy Clause comes in. It makes clear that starting salary, and any changes to salary, are to be kept confidential and can’t be divulged to third parties or to anyone else, including to other employees, without your prior written consent. The same is stated to apply to cash and non-cash benefits, whether those are contractual or have been paid at your discretion. The clause also prohibits the employee from seeking pay and benefits information from another employee.

Equality Act 2010

The Equality Act 2010 makes unenforceable any contractual clause which purports to prevent or restrict an employee from disclosing information about their pay, or from seeking the disclosure of information about pay from a current or former work colleague, so as to consider whether or to what extent there is, in relation to the work, a connection between pay and having (or not having) a particular protected characteristic. This is called a “relevant pay disclosure”. The Act also provides protection against victimisation for employees who disclose information about their pay, or who seek the disclosure of pay information from others, for the same reason. What this means in practice is that, whilst pay secrecy clauses aren’t prohibited, you can’t enforce them where the employee’s pay disclosure is made or sought in the context of investigating possible pay discrimination relating to a protected characteristic, e.g. sex, race, etc. For these purposes, the clause is unenforceable and taking disciplinary action against the employee would amount to unlawful victimisation. That said, the legislation doesn’t require employees to reveal their pay to anyone else if they don’t want to, even if the request is made by a work colleague as part of investigating pay discrimination.