Some jurisdictions have pay transparency laws intended to prevent discrimination based on demographics like gender or race.
Within-firm pay transparency also reveals to workers pay differences across different levels of seniority, which "can lead to more accurate and more optimistic beliefs about earnings potential, increasing employee motivation and productivity."
[2][non-primary source needed] Under Ontario's Employment Standards Act it is illegal for an employer to "intimidate, dismiss or otherwise penalize an employee or threaten to do so" because the worker has disclosed their own wages or because the worker has inquired about the wages of another worker for the purposes of determining the employer's compliance with the law's Equal Pay for Equal Work provisions.
[4] In the United States, the National Labor Relations Act protects the right of employees to discuss compensation without retaliation from their employer.
[5] California, Connecticut, Hawaii, Illinois, Maryland, New York, Nevada, Rhode Island, and Washington have passed compensation transparency laws as of 2023.