Introduction

Recently, Baidu Vice President Xie Guangjun has been caught up in the “salary unboxing” controversy. Weibo user @YourEyesAreTheSmallestLakeInTheWorld (hereafter referred to as “Eyes”) has, since 2024, repeatedly exposed salaries of ordinary people within fan communities. Netizens traced this particular case and suggested that the person involved might be the daughter of Baidu VP Xie Guangjun, because “Eyes” had previously posted an employment certificate claiming that her father’s monthly salary was ¥220,000. The image showed that the employee joined the company in 2010 and currently holds the position of Baidu Vice President.

On March 17, Xie Guangjun posted on his WeChat Moments expressing deep remorse and formally apologizing to all affected friends. While the public expressed outrage over the “unboxing” incident, attention also shifted to the fact that Xie’s salary had been disclosed. In China, most companies enforce a confidential salary system. Once salaries are exposed, employees often risk losing their jobs. Previous cases include a CICC employee earning ¥70,000 per month whose salary was posted on Xiaohongshu by his girlfriend, resulting in unemployment, and a game company programmer with an annual salary of ¥1 million whose girlfriend publicly shared his pay, leading to a report from colleagues and eventual job loss. Now that Baidu VP Xie Guangjun’s salary has been revealed, discussions about potential job consequences have resurfaced.

Salary confidentiality is highly important in Chinese workplaces, but other countries do not necessarily enforce such strict secrecy. While foreigners generally regard salary as private and do not pry, many developed countries in Europe and North America are increasingly adopting pay transparency policies. Under such systems, starting salaries are listed in job postings, and employees can even request information about colleagues’ pay. Since salaries are inherently public in this context, the concept of “leakage” does not exist.

Why have Western countries shifted toward pay transparency? Pay transparency reflects tangible cultural differences between Eastern and Western workplace norms, and it also intersects with labor compliance. Mishandling salary disclosure can easily trigger compliance penalties, making it an issue that overseas-operating companies must pay close attention to.

Pay Transparency as a Means to Achieve Equal Pay

Many governments in Europe and North America are actively promoting pay transparency, with the core objective of advancing workplace equality. Violations of employee equality include “unequal pay for equal work” and “gender discrimination.” For example, Germany’s Act on Pay Transparency mandates that companies with over 200 employees disclose their pay structures, France requires that gender pay gaps do not exceed 5%, and the United States has enacted multiple anti-discrimination laws. The European Union has also issued the EU Pay Transparency Directive, requiring member states to implement it within three years. The directive’s central goal is to ensure pay transparency and fairness, preventing gender-based wage disparities.

Germany, as a frontrunner, officially passed the Act on Pay Transparency on March 30, 2017. Under this law, employees in companies with over 200 staff have the right to know the salaries of male and female colleagues in similar positions. Companies with over 500 employees are required to regularly disclose changes in pay structures to demonstrate compliance with equal pay regulations.

German employees can obtain relevant information from their employers, such as approximate salaries of colleagues performing similar work. The government believes this legislation helps employees assess whether they are receiving fair compensation.

In 2023, the EU adopted the EU Pay Transparency Directive, aimed at strengthening the principle of equal pay. Member states must implement it within three years, incorporating it into national legislation. Key measures include:

Salary Transparency for Job Seekers: Employers must inform potential candidates of the initial salary for the position or at least provide a salary range, and are prohibited from asking about the candidate’s past salary. In other words, salary negotiation based solely on prior pay is no longer allowed.
Employee Pay Transparency: Employees have the right to request information on internal pay structures. This allows them to know their own salary and the pay of colleagues in similar positions, effectively eliminating secretive pay systems.
Gender Pay Gap Reporting: Organizations with 100 or more employees must report internal pay disparities, ensuring that gender does not lead to significant wage differences.
Salary Disparity Reporting: If notable salary differences exist among employees in similar roles, companies must explain the reasons for these disparities and how they plan to address them. This ensures internal pay aligns with role output and responsibilities.
Enforcement Measures: The directive includes penalties for non-compliant employers, including fines and compensation.

Under this framework, companies cannot ask candidates about previous salaries during recruitment, and failure to clearly disclose position salaries can result in strict regulatory action.

Even in the United States, where secretive pay systems have traditionally prevailed, pay transparency is increasingly being promoted. According to the latest report from the Indeed Hiring Lab, as of September 2024, 57.8% of U.S. job postings disclosed salary information. Several U.S. states have enacted pay transparency laws, and more local employers are adopting open pay policies during recruitment.

China’s Labor Law, Article 46, similarly stipulates that wage distribution should follow the principle of remuneration according to work, implementing the principle of equal pay for equal work.

What are the benefits of pay transparency?

SailGlobal Expert Advice:

For companies expanding overseas, pay transparency is an unavoidable aspect when recruiting European employees, yet many companies are not adequately prepared to implement this system. Overseas companies must ensure equal pay for equal work in job design and comply with local laws and regulations.

In practice, the focus of pay transparency is still on the refinement of human resource management. To implement pay transparency, job responsibilities must be clearly defined, along with the output standards corresponding to the salary. Otherwise, employees may question the fairness, and companies may face regulatory penalties.

However, pay transparency can significantly improve company efficiency. Professor Gao Huasheng and his team from the International Finance Institute at Fudan University tracked the productivity of research teams in 67,685 U.S. publicly listed companies with patent records from 1976 to 2017, comparing innovation changes between states that had enacted pay transparency legislation and those that had not.

The study found:

When a state passed legislation prohibiting companies from keeping employee salaries confidential, local companies’ innovation capabilities significantly increased. This demonstrates that pay transparency positively impacts employee productivity, especially innovation.
After implementing pay transparency, minority R&D staff produced more patents with higher quality. This indicates that pay transparency significantly boosts minority employees’ motivation, effectively promoting workplace equality.
In companies with higher expected promotions and raises, the positive impact of pay transparency on productivity was even more pronounced. Professor Gao believes that with clear knowledge of expected post-promotion benefits, employees are more motivated to strive for advancement.

Pay transparency is not a threat; when applied properly, it can support effective business management. Overall, a fairer workplace environment brought by pay transparency benefits employees and better motivates them.

“Will Baidu’s VP Lose His Job After His Daughter ‘Unboxes’ His Salary? Time to Talk About Pay Transparency.”