JOB OFFER REPORTING INFORMATION FOR EMPLOYERS
Legal Considerations
Some employers and school officials cite legal concerns as their reason for not releasing salary information about new hires. Please be assured that Salary Survey is published in accordance with federal and state privacy and antitrust laws. Salary Survey meets all the conditions set forth by the U.S. Department of Justice and the Federal Trade Commission that apply to compensation surveys. You are not violating any statute by submitting salary information.
At the federal level, two laws regulate the disclosure of personal information. The Federal Privacy Act prohibits federal agencies from disclosing personal information about an individual without the individual's prior written consent. Similarly, the Family Educational Rights and Privacy Act (FERPA) prohibits educational institutions from disclosing information in a student's academic record without the student's prior written consent.
Some states have privacy laws that regulate personal or students records; others have constitutions that guarantee the right of privacy to all of their respective citizens. The personal/student record laws prohibit employers and schools from disclosing information about individuals, including students, without their consent. The state constitutional requirement typically applies to any state government action that could violate a person's right of privacy.
The common thread running through the statutory and constitutional requirements is that students and other individuals must give consent before information about them can be disclosed. Employers and schools can meet these requirements by obtaining written consent before disclosing salary information or by disclosing salary data without revealing the person's name. Salary Survey does not require employers to provide student names and does not publish them.
Two federal antitrust statutes apply to the dissemination of salary information among competitors. The Sherman Act prohibits any agreement or conspiracy between two or more entities that would result in an unreasonable restraint of trade. The Federal Trade Commission Act prohibits and remedies unfair methods of competition. State antitrust laws parallel these federal statutes.
At the same time, the courts recognize that it is legitimate for competitors to have information on prices because it leads to increased efficiency in the marketplace. Thus, the exchange of salary information among competitors is not illegal, per se. However, use of the information in a way that restrains competition-for example, if several major employers in the computer industry agreed to cap starting salaries for electronic engineers at $40,000-would be considered a violation of antitrust laws.
In September 1993, the U.S. Department of Justice and the Federal Trade Commission issued a joint policy statement on price surveys that identifies three conditions which, if met, create a "safety zone" for the exchange of information. These conditions are designed to balance a company's interest in obtaining information against the risk that the exchange may permit the companies to set mutually acceptable prices. The conditions, which apply to compensation surveys, are as follows:
The data is managed by a third party.
The survey information provided is more than three months old.
There are at least five firms reporting data, with no one firm representing more than 25 percent of the data. Additionally, any information must be aggregated in a way that will not allow recipients of the information to identify the prices charged or the compensation paid by any particular company.
NACE's Salary Survey meets all of these criteria. Data are
provided by a large number of NACE member colleges and universities,
the information is current, and it is grouped by industry, job function,
degree, and major in a way that no employer's or job candidate's
salary information can be identified.
