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Archive for November, 2014

STATE MINIMUM WAGE CHANGES FOR 2015

In 2014, thirty-eight states introduced minimum wage legislation and ten states and the District of Columbia enacted increases.  Currently, twenty-three states and D.C. have minimum wages above the federal minimum wage, and eighteen states, Guam, and the Virgin Islands have minimum wages the same as the federal minimum wage of $7.25.  Nine states, American Samoa, and Puerto Rico fall under the federal minimum wage due to having either no state minimum wage enacted or a state minimum wage that is below the current federal minimum wage. 

As a result of the November 2014 ballot measures, four states – Alaska, Arkansas, Nebraska and South Dakota – approved minimum wage increases in the 2014 election; Illinois voters approved an advisory measure.  Minimum wages will go up in nine states on Jan. 1, 2015 because of indexed increases in their state law: Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Ohio, Oregon, and Washington. 

Alaska’s minimum wage will increase from $7.75, to $8.75 effective Jan. 1, 2015 and to $9.75 effective Jan. 1, 2016. In subsequent years, the state minimum wage would be automatically adjusted based on inflation or remain $1 higher than the federal minimum wage, whichever is greater. 

Arkansas’ minimum wage includes a three-step increase to $7.50 effective Jan. 1, 2015; to $8 effective Jan. 1, 2016; and to $8.50 effective Jan. 1, 2017. 

Nebraska will increase it’s minimum wage to $8 effective Jan. 1, 2015, and to $9 effective Jan. 1, 2016. 

South Dakota’s minimum wage will increase to $8.50 effective Jan. 1, 2015, and provides for automatic annual increases in subsequent years, based on inflation. The measure also includes a raise to the state’s tip credit, from $2.13 to $4.25. 

Illinois voters approved an advisory question that asked whether they would support increasing the state minimum wage to $10 by Jan. 1, 2015. 

Follow this link to the WageWatch Federal and State Minimum Wage Chart with details of state and local minimum wage and pending increases.  http://wagewatch.com/resources/Minimum%20Wage%20Chart.xlsx 

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on November 19th, 2014 · Comments Off on STATE MINIMUM WAGE CHANGES FOR 2015

EXTREME MINIMUM WAGE HIKES Part 1

The idea of extreme minimum wage increases, which is also known as a living wage by unions and the political left in the U.S. and socialist regimes around the world, has been with us for centuries.  In fact, last December 6th President Obama in making a political speech for an increase in the national minimum wage to $10.10 used Adam Smith and The Wealth of Nations, published in 1776, as the foundation for his argument.   

Anytime a reference to Adam Smith, the Father of free-market economics as President Obama referred to him, is made to support an economic argument about minimum wages or a living wage you need to be cautious as those were not hot topics of the day in the 1770s.  Of course, as it turns out on further investigation, Adam Smith was not an advocate of increasing wages for the purpose of fairness or for any other social ideal.  The problem he was wrestling with in the 1770s was England was the richest country in the world but paid its workers less than Americans were made in the thirteen colonies for the same work. Adam Smith wrote in The Wealth of Nations: 

‘It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest. England is certainly, in the present times, a much richer country than any part of North America. The wages of labour, however, are much higher in North America than in any part of England.’ 

Smith argues that the real standard of living for common workers–that is, what a common worker can afford to buy–had been rising due to technological advances.

He goes on to say that it is through industrialization and efficient production that wages as measured by what they can buy will continue to increase. Quoting Adam Smith in support of minimum wage legislation is a real stretch.  From his writings, it is more likely that Adam Smith would say that rapid economic growth with a tight labor market such as we experienced in the mid to late 1990s in the U.S. was the best way to benefit the average workers. 

Why begin the discussion about extreme minimum wage increases with quoting Adam Smith? The answer is simple; one needs to understand how it began and the history of it over time in order to understand how to address it under the current circumstances. You often see Adam Smith quoted as being an advocate for increasing wages which benefits all workers up and down the economic ladder, but he did not make that argument as part of his economic theories or any other theories. 

Overtime, most economic and social writers have addressed the issue of a minimum wage or in their minds a fair wage. Karl Marx and Frederic Engels created an economic system based on the idea, of course as implemented in Russia, China and Cuba to name a few, it failed. The Catholic Church as a response to Das Capital has called upon employers for over 100 years to pay a living wage. Father Paul Ryan, a leading social and economic writer of his time wrote his thesis entitled A Living Wage in 1912. His book became the foundation for all social and labor arguments for a living wage that followed including the very first national minimum wage passed in 1938 under President Franklin D. Roosevelt.

So, with the final approval by the Los Angeles City Council on October 1, 2014 and a commitment from Mayor Garcetti to sign the ordinance, the minimum wage for hotels will increase to $15.37 on July 1st next year (LA Hotels and the Minimum Wage). This is just the latest effort in a century long crusade to secure higher wages.  The heated rhetoric and local efforts to enact extreme minimum wage increases around the country are championed by labor unions and their political supporters versus private employers. It will not fade away as Chambers of Commerce continue to hope it will — there are over 130 cities already with living wage laws around the country.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives and that your pay practices are fair, equitable and non-discriminatory. We can provide your business with compensation surveys and salary reports to help you establish a budget for your merit pay program, including bonuses and incentives. Our innovative company is a leader in the collection of data for surveys and salary reports, which allows us to provide services to a wide range of industries in both the private and public sector. To learn more about our compensation surveys, salary reports and other services, please call 480-237-6130 or contact us online.

Posted in Uncategorized on November 13th, 2014 · Comments Off on EXTREME MINIMUM WAGE HIKES Part 1

COMPENSATION PROGRAM KEY OBJECTIVES

Compensation can be defined as a reward earned by employees in return for their time, skills, effort and knowledge.  Compensation includes direct financial compensation, such as wages, bonus and commissions, indirect financial compensation such as health and welfare, retirement and leave benefits and non-financial compensation such as job training and development, recognition and advancement opportunities.  A large percentage of the company budget is compensation, and therefore is a key component of the overall strategic human resource management plan. 

A compensation package can include more than salary and bonus.  It can include health and welfare benefits, retirement plan, leave benefits and various other benefits and perks.  Companies that offer a mix of salary and incentives have the highest employee morale and productivity.  It is most effective to pay incentives as soon after goals are met as feasible such as month or quarter incentive payments, rather than annual.  A good incentive plan should be easily understood by the employees with no more than two to four performance factors.  How you train, develop and manage your employees will also drive retention and performance.

When developing your compensation program, primary objectives to consider are: 

  • To attract the best people for the job
  • Retain high performers and lower turnover
  • Reward performance on specific objectives by compensating desired behaviors
  • Motivate employees to perform their best
  • Improve morale, job satisfaction and company loyalty
  • Align with overall company strategy, goals and philosophy
  • Achieve internal and external equity
  • Comply with all pay and non-discrimination regulations

While compensation is not the only thing that motivates people, compensation that is too low will demotivate employees.  Studies have found a direct correlation between top performing companies and employees that are satisfied with their pay and benefits package.  Competitive and appropriate pay can positively impact customer service.  Employees receiving fair and competitive compensation packages are generally happier with their jobs and are more motivated to perform at their peak.  Motivated employees can add to the bottom line of the organization and contribute to growth and expansion. Studies show that motivated employees take fewer sick days and have fewer disability claims.

While there are many objectives to a successful compensation program, two key objectives are ensuring internal equity and ensuring external competitiveness.  Salary Surveys provide the necessary market data to build competitive pay structures.  Good Salary Survey data provides you with the information needed to ensure your compensation package is competitive.  Salary Surveys are an invaluable tool for the setting right compensation strategy and for following and monitoring the desired pay market.  It is important that you select the right salary and benefits surveys and market data for your employees based on where you are competing for talent in your industry and outside your industry as well as geographic location.

WageWatch offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Posted in Uncategorized on November 6th, 2014 · Comments Off on COMPENSATION PROGRAM KEY OBJECTIVES