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Archive for December, 2016

THE DATA TELLS A STORY

Determining the appropriate salary level is never as simple as we would like. The reason is that despite all the diligent work that goes into salary surveys, the resulting pay data for a given job is always a broad range.  So deciding what precisely to pay an individual takes good judgment that comes with experience.

The challenge in the interpretation of salary survey data is that it requires a combination of good analytics and common sense. The reality is that often a lot of work is required in order to analyze market pay and determine your pay point and pay range. This often involves analyzing several surveys and/or survey reports and considering other factors such as company strategy, payroll budget, and internal equity before landing on an appropriate salary.  As Compensation and HR professionals we have to be able to say, here is the data, here is how it is analyzed, and here are the judgments we made as experienced professionals.

The WageWatch PeerMark ™ report allows our survey participants to build their own competitive sets, select from a list of 300+ job titles, and quickly generate a market variance report for the participant’s local market.  For the more demanding and complex data needs, a WageWatch Consultant can build your custom reports for you that will meet your specific needs. We will work with you to define your report specifications, target market areas, competitive set and any other specifications.

WageWatch compensation consultants are your data partners on whom you can rely on to get the most comparable data from your market, with the expertise to know how and what data to extract from each market or sub-market in order to provide you with survey report(s) containing the best competitive results.  Custom reports solve many compensation problems.  For example you may run into a market area that is heavy with one or two competitors not allowing you to report any data or perhaps the survey market does not contain enough competitors of a similar size and scope that fits your organizational needs.  This is where our compensation consultants can assist having the experience needed to work around some of these challenges and capture your specific needs such as peer groups, industry focus or geographic cut.  This additional data analysis can enhance the overall story that you will have to present back to your executive team.   We can build multi-market competitive sets across multiple locations. These many be niche markets in highly competitive hyper segments or broad multi-city or state benchmarks for management companies entering new markets. Custom reports can also be powerful resources for developing union defense strategies, management and executive job pricing, pricing jobs in rural markets with few competitors, segmenting markets into micro markets, and blending markets into macro markets.

WageWatch compensation consultants can also help you with your analysis of the market data compared to your current salary ranges and incumbent salaries to update your current structure or in creating a whole new structure.  Perhaps you are looking at moving more toward performance-based pay.  We are prepared and experienced to be able to help you with a variety of compensation needs, for example,  analyzing the compensation impact of organizational changes with an internal equity and external competitiveness analysis. Our analysis is full service.  In addition to the compensation review, our consultants can help with FLSA classifications, hybrid jobs, writing job descriptions, mapping new organization charts, and crafting employee communications.

As the economy continues to improve, we expect to see more pressure put on salary budgets and merit increases in order to meet rising demand for talent. Our consultants can work with you to get the balance right on budgeted wage increases and their relationship with structure adjustments.  When wage increases and adjustments are made, often other potential concerns are uncovered such as wage compression and paying out of range. WageWatch consultants are here to offer comprehensive guidance on your structure maintenance and adjustment requirements.

WageWatch salary surveys provide data tools and report statistics for analysts of all experience levels. Please contact WageWatch if you need assistance with interpretation the statistics reported, help building custom reports, or have a need for our wide range of consulting services. For more information on our services and surveys please call WageWatch at 888-330-9243 or contact us online.

 

 

BEST PRACTICES FOR BONUS COMMUNICATION AND DELIVERY

The primary purpose of an annual incentive or bonus plan is to drive and reward behaviors that have an impact on the operating success of the company.  When designing your incentive plan you need to have a clear measurement system for what success is in your company and then make sure the measurements are meaningful to the employees who are doing the work.  For any incentive plan to be effective it needs to be meaningful and have clarity relating both to the plan provisions and to the results needed to earn and maximize an award and the award should be attainable.  Employees need to see a link between how their job performance affects results, and the award amount needs to be sufficient enough to motivate.

Generally, two to four performance metrics are included in a bonus plan design.  The metrics are primarily financial, though quantifiable business objectives can also be used. Corporate or business unit financial metrics are used to fund the incentive pool, and individual performance measures may also be used to determine final individual payouts.   Results that are measured can be quantitative and qualitative, such as customer service quality, the number of customers served, and the effectiveness of programs, etc. Often a balanced scorecard approach is used.

Employers should give careful attention not only to the design but also to the implementation and communication of incentive programs.  The most common pitfall when creating a bonus program is inadequate communication.  Bonus plan communications should be both clear and timely.  Make sure the plan is communicated prior to the beginning of the bonus period and this initial bonus communication should address the structure of the plan, decision-making criteria, fairness, measurability, and target.  Equally important are follow-up communications regarding the progress toward attainment of the goals that should happen at frequent and regular intervals throughout the bonus plan period.  You want your employees to have an on-going understanding of where they are and what they need to do to meet and/or exceed their bonus target.

When bonuses are paid or awarded, clear communications again are very important.  Managers should have individual meetings with each bonus plan recipient and clearly communicate the outcome for the incentive period.  Whatever the amount, be sure to let the recipient know that he/she is valued.  Be sure to discuss specific accomplishments and strengths that went into the bonus award.  If the employee was expecting more, be sure to emphasize the broader context of the company’s approach to bonuses.   Let each person know how the bonus was calculated.  No matter what the award is, the conversation regarding the award amount is an opportunity not only for clarity and understanding but to thank the individual for their hard work and to hopefully improve morale and motivate for future performance.

Employees want to know they are being fairly compensated for their work and their job performance.  Bonus plans that are meaningful to your employees and aligned with the bottom line of your company can help build moral and drive behaviors that are critical to the success of the company.

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, incentive 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.

JOINT EMPLOYER LIABILITY

The use of sub-contractors, temporary staffing, leased employees and independent contractors can provide employers with quick temporary staffing and reduce benefits and payroll costs. However, the employer client can be considered a joint employer with the leasing or temporary agency when they share certain key employment terms such as the ability to hire, fire or discipline the workers, affect their compensation and benefits, and direct and supervise their performance.  When businesses use temporary agency, leased, or contract workers, though the employer is the temporary help, leasing, or contracting company, the client business may be regarded as a joint employer under some laws.

The Family and Medical Leave Act has specific language regarding joint employer relationships. While the leasing or temporary help agency is the primary employer, the client company may be required to place the worker in the same or comparable position upon his or her return from FMLA leave.  Additionally, leased and temporary workers will count as employees of the client company for the purposes of determining whether a business is subject to the FMLA regulations.

In the Tax Equity and Fiscal Responsibility Act of 1982, leased and temporary workers are the client’s employees for the purposes of qualifying retirement plans and certain fringe benefits such as life insurance and cafeteria plans (does not apply to health insurance benefits), if the workers have been engaged with the client company on a full-time basis for a minimum of one year and the client company primarily controls or directs their work.

An employer can face a charge of discrimination under Title VII anti-discrimination legislation brought by an individual who worked for the employer under one of these leasing or sub-contractor relationships.

It has also come into question with the National Labor Relations Board (NLRB) whether leased and temporary workers must be included in collective bargaining agreements that cover the client’s regular employees.

Some states have passed legislation on joint employer liability as it pertains to workers’ compensation regulation.  New York ruled that the client is the common law employer of leased employees and is therefore primarily responsible for providing workers’ compensation benefits. To date there have been no guidelines for joint employer status under OSHA or other health and safety regulations.

Employers need to be aware of and have guidelines regarding the degree of control they have over these temporary, leased and contract workers. The greater the degree of control, the greater the likelihood that the employer could be determined to be a joint employer.

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.

NEW FLSA OVERTIME REGULATIONS ARE IN TURMOIL

In September, 21 states sued the Department of Labor to block implementation of the FLSA overtime regulations slated to go into effect on December 1st of this year.  Separately, over 50 business groups challenged the DOL’s authority to establish a salary test for determining if an employee is or is not exempt from overtime. Those two cases were eventually consolidated.  On November 22nd, federal judge Amos Mazzant, a judge for the eastern district of Texas, appointed by President Barack Obama, entered a nationwide preliminary injunction to stop the implementation of the new overtime regulations. The new regulations would have increased the minimum salary for exempt “white collar” executive, administrative and professional employees from $455 per week to $913 per week, or $47,476 per year.

The Federal Court ruled that Congress intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties rather than an employee’s salary.  The Court concluded, that the new regulations, which raise the salary threshold significantly would have created “essentially a de facto salary-only test.”  The Court explained, “[t]he [DOL’s] role is to carry out Congress’s intent.  If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.”

This past Thursday, December 1st, the DOL filed an appeal asking the Fifth Circuit Court of Appeals to overturn the preliminary injunction against its new overtime regulations. Since an appeal in the Fifth Circuit can take a year or more, many labor experts and attorneys expect there will be further legislative or administrative action once the Inauguration occurs and a new Secretary of Labor is in place and this likely will happen well before a final court ruling takes place.

However, many employers have already implemented changes, by either raising exempt employees’ salaries to meet the new threshold or reclassifying employees who are still earning less to nonexempt status.  Employers who have already implemented such changes, may want to leave decisions in place as It would be difficult to take back salary increases.  Employers may want to postpone reclassifications that have not yet been done to give the litigation a chance to play out.  And Employers may want to communicate that there may be future changes depending on Federal Court, Congressional, or Trump administration activities.  Employers shouldn’t assume that the overtime rule will be permanently barred and should have a plan to move forward if necessary in the future.

This said, here are a few possible future scenarios that could unfold:

  • A lame-duck Congress comes up with a compromise bill for President Obama’s signature (not likely);
  • President Elect Trump addresses this after his confirmation by abandoning the Obama administration’s defense of the final rule; and
  • The new administration may introduce legislation seeking a compromise, with a lower, or graduated salary threshold increase, and without the automatic escalator clause.

Regardless of what action the current administration or the new administration take, it is very likely we will see more activity at the state and local government levels. Unions are leading the effort for a $15 minimum wage at the state and local levels. They have had some success in California, Oregon, Washington and New York. As part of that effort, adding a doubling of salary for exempt employees is a logical extension of the unions’ efforts. Why? Because the minimum wage effort impacts exempt employees under FLSA. Exempt employees who are not paid for overtime may see their line employees earning more than they do.

WageWatch offers accurate, up-to-date HR metrics, 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.