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OREGON—8th STATE TO PASS FAMILY/MEDICAL LEAVE

Family Med Leave

Oregon officially became the most inclusive law in the country, with respect to paid family and medical leave, when Governor Katy Brown signed the bill into law last week (July 1, 2019).

  • The law covers 12 weeks annually, to new parents, victims of domestic violence, and people who need to take care of an ill family member or themselves; an extra two weeks is given for those giving birth (New Jersey is the only other state which includes domestic violence victims in paid leave legislation)
  • Family is defined to include “any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship”
  • Oregon will be the first to pay low-income works 100% of their wages when they’re off, with weekly benefits capped at around $1,215 (you must earn at least $1,000 in wages a year to qualify)
  • The law will be funded through a payroll tax (not to exceed 1% of employee wages)
  • Employees pay 60% of the total rate and employers will cover the remaining 40%
  • Employers with less than 25 employees will not pay into the program
  • The program will start taking contributions in 2022, and people will be able to start using it in 2023
  • Research suggests paid family and medical leave improves participation rates for new mothers in the labor force, with corresponding benefits in pay equality, infant and child health, and lowers poverty rate
  • The program will take a few years to get started because it’s a new social insurance program, just like unemployment insurance or workers compensation.

The additional states that have adopted a paid family and medical leave policy include the following (along with the effective date):

    • California (2004)
    • New Jersey (2009)
    • Rhode Island (2014)
    • New York (2018)
    • District of Columbia (2020)
    • Washington (2020)
    • Massachusetts (2021)
    • Connecticut (2022)

Paid leave is on the national legislative agenda with new momentum.  This new law in Oregon represents the eighth state, along with the District of Columbia, to adopt a paid family and medical leave policy.  Full wage compensation for American workers in poverty will likely motivate more employees to take advantage of paid leave benefits.

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.

HUMAN RESOURCES: THE GATEKEEPER FOR COMPANY ETHICS

Gatekeeper - HR

Business ethics are important to every business and are often a component of a company’s core values.  However, that doesn’t mean that the organization is ethical.  To build an ethical organization, leadership must establish, and model the company’s core values.  Ethics must be woven into the fabric of the organization, fully supported by leadership and integrated into the company’s philosophies, values, policies, procedures, and practices.  HR departments represent employees, their concerns, and deal with fairness issues.  HR’s role in ethics management should be central to ensure real benefits for the organization and the employees.  Human resources deal with a variety of ethical challenges that if not handled properly can damage a company’s reputation, lead to serious legal issues, and lead to a potentially high-cost impact on an organization.  For example, discrimination issues, sexual harassment, and unfair employment policies that can damage a company’s reputation as well as lead to a severe financial impact.

However, HR departments should not be expected to manage ethics initiatives on their own.  For ethical behavior to become part of an organization, there needs to be a collaborative effort that also includes Legal, Audit, the top management team, and the board of directors.  HR should have a primary role in the development and integration of ethics programs into key organizational activities, such as the design of performance appraisal systems, management training, and disciplinary processes.

The first step to include ethics in company policy and strategies is to put ethics on the agenda, make it part of the conversation.  This can begin the process of ethics to become part of the organization’s culture, business plan, and goals.  HR professionals can help leadership define ethics for the organization.  For example, what are the specific types of ethical issues that impact your organization, your competitors, and your industry?  This process of defining what ethics means to your organization can help determine safeguards that can be included in policies and processes such as recruiting, onboarding, and leadership training.  Ensure ethics policies are in place for issues such as discrimination, sexual harassment. and employee fair treatment.  Establish and communicate expectations for your employees to ensure each employee understands their role.  Communications surrounding ethics and other core values should be on-going.  HR professionals are in leadership roles and employees look to leadership to guide their own behavior.  Organization leaders need to set the example by engaging in legal and moral behaviors, and by showing their respect for the employees and for the organization.  It is critical to creating a supportive environment of trust and transparency.  Employees need to see fair treatment across all levels and need to trust in order to come forward regarding ethical concerns.  Ethics panels can be created for the review of issues and violations.

Treating employees ethically can bring tremendous benefits to an organization.  It can earn long-term employee trust and loyalty.  Loyal employees gain more experience, and master processes, and become more vital to the success of the organization.  Loyal employees are happier employees and can also translate into increased productivity and efficiency as well as minimize recruiting and training costs.  Putting a Code of Ethics in place and encouraging leaders to model desired behaviors are important first steps toward creating an ethical organization.  Holding ethics high as a core company value is key to a company’s success and longevity.

Having the appropriate employee fairness policies and processes in place is critical to maintaining an ethical organization.   But it is equally important that these policies and processes are supported by fair and competitive compensation practices.  For the good of your employees, it is helpful to analyze benefits survey data, compensation surveys, and salary reports.  Having this information at hand allows you to plan a budget, including competitive employee salaries and benefits, which will help you to hire and retain a happy, talented team.  At WageWatch, our expert evaluators provide businesses in a large range of industries with accurate and beneficial benefits survey data, compensation surveys, and salary reports to ensure that payment and benefits plans are on par with those in the industry.  For more information on market compensation data, please call WageWatch at 888-330-9243 or contact us online.

 

PAY EQUITY ANALYSIS

Pay Equitu

To manage the risk of pay discrimination, organizations should conduct periodic pay equity analysis.  The goal of a pay equity study or analysis is to identify problems and ensure compensation practices are fair and equitable.  The study should look for trends that identify the disparate impact on wage rates.  Data elements to include in the analysis are hire dates, hire rates, performance rating, merit increases, age, ethnicity, gender, and promotion dates and increases.  Group the data in job classifications and departments by the hierarchy as well as grouping comparable jobs across departments.  Sort the data by the various data elements to see what emerges.  This analysis can identify wage inequities as well as explain some of the differences in pay among comparable employees.  A thorough analysis is important for managing the risk associated with pay discrimination claims.

Differences in knowledge, skill, ability, effort or responsibility provide a legitimate basis for differences in pay among employees doing the same work. However, these factors can be difficult to validate or prove, and therefore you will need to rely on the data that is readily available including:

  • Job title or grade
  • Time in current job or grade
  • Job duties including the degree of responsibility
  • Job status (Full or part-time, exempt or non-exempt, etc.)
  • The location where the employee lives and works
  • Company service time
  • Education
  • Prior experience
  • The market value of a job
  • Performance Review documenting effort in terms of quantity and quality of work

Pay equity issues can occur over time as a result of flaws in a compensation process including:

  • Insufficient training of Managers regarding performance, merit and other increases
  • Inefficient and inconsistent merit pay processes
  • Decisions being made in “silos” and without consistent checks such as HR/Compensation approval
  • Making decisions without market or internal data for guidance
  • Reactive hiring decisions relative to “hot” jobs
  • Poorly maintained salary structures that have not kept step with the market
  • Failure to reclassify jobs as changes in responsibility occur

A pay equity study will involve the input an experienced compensation analyst and/or specialist as well as HR information systems and may involve appropriate legal counsel.  Once pay inequities are discovered, HR will need to determine a timeline and the funding for the pay equity adjustments.

In 2009, President Obama signed into law, the Lilly Ledbetter Fair Pay Act which increased organizations’ exposure to pay discrimination claims by overturning a rule that workers must sue for pay discrimination within 180 days after the original pay decision was made.  As a result of the Act, each paycheck now resets the clock and employees can file lawsuits for perceived discriminatory pay decisions even if the pay decision occurred years earlier.  So, it is more important than ever for employers to carefully document all pay decisions and stay on top of pay equity in their organizations.

In 20016, the Obama administration announced executive action which requires companies with 100 employees or more to report to the federal government how much they pay their employees broken down by race, gender, and ethnicity.  It is hoped that this transparency will help to root out discrimination and reduce the gender pay gap.

On March 27, 2019, the U.S. House of Representatives voted to pass the Paycheck Act, an act designed to amend and strengthen the existing federal Equal Pay Act.  The Act further provides that the “bona fide factor” justifying gender-based pay disparities would only apply where “the employer demonstrates that such factor is: 1) not based upon or derived from a sex-based differential in compensation, 2) is job-related with respect to the position in question, 3) is consistent with business necessity; and 4) accounts for the entire differential in compensation of issue.”  The Paycheck Fairness Act has been moved to the Senate for consideration and voting.

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.

EFFECTIVE JOB DESCRIPTIONS

Job Describe

Job descriptions describe the major duties and responsibilities of a position or job and are an essential part of hiring and managing employees.  They are tools to help your applicants and employees understand their roles and accountabilities.  They can be used to establish a training checklist for new incumbents, as guideposts in the performance appraisal process, and as market benchmarks for compensation surveys.  Job descriptions are not required by law however, they can provide evidence of the essential functions of a job for purposes of complying with federal employment laws.  They can also be used for disability and worker’s compensation claims.  It’s good practice to get legal advice to ensure that your job descriptions are compliant.  Below are some of the legal requirements to keep in mind while writing your job descriptions.

  • Fair Labor Standards Act (FLSA):  Exempt or Non-exempt classification should be included in all job descriptions.
  • Occupational Safety and Health Act (OSHA) and the Americans with Disabilities Act (ADA):  Working conditions and any required physical activity should be noted in all job descriptions.
  • Equal Employment Opportunity Commission (EEOC):   Include, “we are an equal opportunity employer” in all job descriptions.
  • Age Discrimination in Employment Act (ADEA):  Job descriptions should not indicate age preference.

The first steps in writing job descriptions are the data collection and job analysis processes which begins with questionnaires and/or interviews with both the supervisors and current employee incumbents to gather and determine the key facts about the job.  You will need to collect information that will later be summarized in your job description template.  Generally, the data  will include Job Title, Immediate Supervisor, Department, Pay Grade, Working Hours, and Travel Requirements, FLSA Status, Mission/Summary, Essential and Non-Essential Tasks and Responsibilities, Supervisory Responsibility, Job Requirements (education, skills and experience required for the job), Working Conditions, Physical Demands, Equipment Usage, and Disclaimer for Management Ability to Modify.

A job description should be practical and summarize the key elements of a job in a clear, concise manner.  Be specific and avoid using subjective adverbs or adjectives such as “frequently,” “some,” “occasional,” and “several.”  It’s important to build flexibility into a job description and ensure that it is dynamic and functional.  Flexible job descriptions will allow your employees to evolve within their positions as processes, technology, and organizational changes occur.  A well-written job description will require an investment of time and effort to accurately reflect your organization and unique jobs.

The duties list should contain each essential job duty or responsibility that is critical to the successful performance of the job.   The list should be prioritized with the most important listed first down to the least significant.  Do not include tasks that comprise less than 5 percent of the overall time.  Each Essential and Non-Essential Duty should be assigned a percentage of time and all duties together should total 100 percent.  Each duty should be described in one to three sentences; the first sentence should begin with an action verb.  Generally, there are one or two non-essential duties that total five to ten percent of the total time and are duties such as “Assist in special projects as required” or “Any other task assigned by the supervisor.”   This provides flexibility to change duties over time and captures occasional and unforeseen needs that arise.

At WageWatch 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.  WageWatch also 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. 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 .

 

LINKING PAY PRACTICES WITH BUSINESS OBJECTIVES

Link PayCompensation plays a critical role in organizations’ ongoing and increasingly challenging efforts to attract, retain, and motivate a talented workforce.  Compensation design and management play a vital role in aligning employee behavior with business objectives.  Human capital costs represent a significant part of most organizations’ cost bases and need to be spent as effectively as possible.  It is vital to understand the consequences pay decisions can have on your organization.

Salary structures are an important component of effective compensation programs and help ensure that pay levels for groups of jobs are competitive externally and equitable internally.  A well-designed salary structure allows management to reward performance and skills development while controlling overall base salary cost with a salary range cap.  Market pricing is the most common method companies use to design base salary structure ranges using external market data combined with a focus on internal pay equity.  The goal of market pricing is to keep the organization from 1) underpaying, resulting in losing talent to competitors, or being unable to attract the talent it needs and, 2) over-paying which wastes organizational resources and impedes desirable turnover.  The secret to effective market pricing is the ability to spot and adequately analyze and level the data anomalies and imperfections using both science and experience.

Some organizations elect to pay lower than the market and offset lower than market wages with offers of ‘good’ benefits, meaningful work and stability.  This practice can lead to employee disengagement and organizations risk losing people.  Also, the organization will likely attract people who couldn’t get ‘better’ jobs with higher pay.  One of the key determinants of job satisfaction or dissatisfaction is how employees feel their pay package compares to others.

Pay-for-performance programs are used to award employees for desired behaviors and outcomes and they take many forms, including cash bonuses, company stock, and profit sharing.  Pay-for-performance plans have a learning curve, and they require regular maintenance in order to be and remain effective.   Incentive compensation plans need to align with the company’s business strategy, mission, goals, and objectives.  They should address the root causes of performance and the goals must reflect a balance of financial results and the key business drivers.  Payout opportunities should be consistent with the performance value and meaningful to employees.

While pay-for-performance plans provide a financial incentive to employees, there can be disadvantages.   If not crafted carefully, they can cause employees to focus more on quantity over quality.  They may impede teamwork if workers view helping another employee as wasting valuable time that could be spent on reaching their own goals.  And just like base pay, incentive pay should be competitive with the market or it could fall short of motivating the employees.

Smart, successful organizations do regular planning and evaluating their compensation and performance rewards systems.  Compensation is visible and important to employees.  It is critical to have a solid and competitive pay strategy where pay decisions and policies match the objectives of the organization.  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.

HIRING STRATEGIES IN A TIGHT JOB MARKET

Hire Ppl

It is becoming increasingly challenging to recruit top talent due to the relatively low unemployment rate, the increase in job openings, and the lack of experienced candidates.  These factors require that companies need to be more creative and aggressive in their hiring practices.  In addition, there has also been an attitude change; it is much less of ‘who do I want’ and more of ‘who wants me’ attitude.  Listed below are some tips that may help provide success in the search for new talent:

  • Use multiple forms of social media: LinkedIn, Twitter, Facebook and actively engage on them.  Connect to related industry and check the posts and comments.  If there is someone who stands out, you may have found a new employee
  • Turn part-time positions into full-time positions
  • Provide training opportunities for current employees to fill open positions
  • Restructure work in ways that adapt to the new workforce; reduce education and other requirements
  • Review the list of job skills and keep the most essential skills versus losing a perfect candidate
  • Partner with a local community college and offer to speak with students; provide internship opportunities
  • Participate in job fairs and get involved in the local community
  • Speak at professional organizations and/or special interest meetings to meet potential candidates
  • Offer incentives to current employees who refer new hires, post open positions for visibility to all employees
  • Post for positions that you may have no intention on filling to gain a supply of candidates when a job does open-up
  • Provide a sign-on bonus to new employees
  • Ensure company website is mobile-friendly; a high percentage of searches are conducted using mobile devices

Another important factor is to understand the current perceptions of your company.  It is much easier to keep current employees versus hiring new employees.  It may be valuable to consider the following tactics to retain your current talent:

  • Be more competitive in wages
  • Provide employees stock ownership and/or stock options
  • Offer training programs for current employees to enhance bench strength
  • Provide a sense of organizational purpose and mission (valued by Millennials)
  • Permit flexible work schedules and work at home opportunities (valued by Millennials)

During the interview process, it is more important than ever to ensure that the process is as quick as possible to not lose viable candidates; ensure ongoing communication throughout the process to demonstrate interest.

Change can be challenging and demanding.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and help ensure your wages and salaries are supporting your company’s business strategy and objectives.  In addition to our PeerMark  Salary Survey for over 100 local lodging markets in the U.S. and Canada, we offer a National Benchmark Salary Survey. With over 9,000 hotels and 200 casinos in our database, WageWatch’s hotel and gaming salary surveys are the most comprehensive surveys available to Human Resource professionals.  For more information on our services, including consulting, salary surveys, benefit surveys, and custom compensation reports, please call WageWatch at 888-330-9243 or contact us online.

KEY OBJECTIVES OF A COMPENSATION PROGRAM

CompCompensation 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 it 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 monthly or quarterly incentive payments, rather than annual payments.  A good incentive plan should be easily understood by the employees including 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, the 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.

MOTIVATING EMPLOYEES THROUGH JOB DESIGN

Job Design-B

With changing demographics and a more competitive job market, human resources are more challenged than ever before to hire, engage, maintain and keep employees happy and motivated.  Workers want more choice and flexibility in how they approach tasks.  They look for more opportunities to change duties, for exploration, to learn and to advance in their career in a less linear way.  It is not only desirable but essential for businesses to have motivated employees.  Today many human resource professionals are looking at how to design jobs, work environments, and cultures that motivate employees.

Job design is a deliberate attempt to structure the tasks and social relationships of a job to create optimal levels of variety, responsibility, autonomy, and interaction.  The primary objective of job design is to ensure a fit between the job and its performer so that the job is performed well and the job performer gains satisfaction from doing it.

There are multiple strategies for job design:

Job rotation involves moving employees from job to job at regular intervals. When employees periodically move to different jobs, the monotonous aspects of job specialization can be relieved.

Job enlargement consists of making a job larger in scope by combining additional task activities into each job through expansion.  It focuses on enlarging jobs by increasing tasks and responsibilities.

Job enrichment is focused on designing jobs that include a greater variety of work content, a higher level of knowledge and skill, provide the worker more autonomy and responsibility, and provide an opportunity for personal growth.

Research shows that there are five job components that increase the motivating potential of a job: skill variety, task identity, task significance, autonomy, and feedback.

  • Skills
    • People will be more motivated if they are using a variety of skills in their positions, rather than one thing repeatedly.
  • Task Identity
    • Employees are motivated to complete tasks if they identify with them and have seen them through from start to finish.
  • Task Significance
    • When employees feel that their work is significant to their organization, they are motivated to do well.
  • Autonomy
    • Employees like to be able to make decisions and have flexibility in their roles. Most employees will have lowered motivation if they feel they have no freedom or are being micromanaged.
  • Feedback
    • Employees need feedback (both positive and negative) in order to stay motivated.

Quality of life in a total job and work environment is also an important part of a positive and motivating experience for employees.  The elements included in ‘quality of life’ include open communication equitable reward system, employees’ job security, and satisfaction, participative management, development of employee skill, etc.  Since a significant amount of one’s life is spent at work, jobs need to provide satisfaction for sustained interest.  Jobs provide employees not only a living but also help in achieving other goals such as economic, social, political and cultural.

The concept of empowerment extends the idea of autonomy.  The idea behind empowerment is that employees have the ability to make decisions and perform their jobs effectively.  Instead of dictating roles, companies create an environment where employees thrive, feel motivated, and have the discretion to make decisions about the content and context of their jobs.  Empowerment is a contemporary way of motivating employees through job design.

A growing body of research on the relational structures of jobs suggests that interpersonal relationships play a key role in making the work experience important and meaningful to employees.  Interpersonal relationships can often enhance employees’ motivations, opportunities, and resources at work.

Though employees need to have some intrinsic motivation (internal motivation) to complete the tasks assigned to them in their roles, they also need to be motivated by their employers. By designing jobs that encompass all of the core characteristics, you can help increase employee motivation, in turn improving performance.

WageWatch offers accurate, up-to-date benefit survey data, market compensation data. and salary reports that will allow you to stay current. This information is beneficial in creating the best salary, incentive, and benefit packages that meet or rival industry standards.  The PeerMark™ Wage Survey 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.

ASKING ABOUT SALARY HISTORY COULD SOON BE ILLEGAL

Banned-Sal Hist-B

Employers have asked salary-based questions as one method of gaining an accurate picture of an applicant’s qualifications for a position.  Federal laws do not prohibit requesting the information, however, there is a growing trend for some states or cities and counties to outlaw employers from requesting salary history.  Last February 2018, we published a blog focused on the states that have banned salary-based questions from job applicants; the trend to ban these questions has greatly increased and Congress continues to explore the ban on salary questions.  This post updates action taken over the past year.

With the objective of pushing to fight wage discrimination and the gender pay gap, a bill was recently introduced (February 2019) in Congress that would ban salary questions across ALL states.  The proposed Paycheck Fairness Act would prohibit employers nationwide from asking job applicants about their salary history and require employers to prove that pay disparities between men and women are job-related. The bill forces employers to develop salary offers based on job requirements and market pay levels rather than an applicant’s current salary or salary history, which may be lower than current market rates for some individuals’ skill and experience.  The proposed legislation would strengthen the Equal Pay Act.

The following states and cities or counties have banned salary questions by public and/or private employers:

STATE

CITY  COUNTY EFFECTIVE DATE

DETAILS

California State-Wide JAN 2018 All employers, including state and local government
Connecticut State-Wide JAN 2019 All employers
Delaware State-Wide DEC 2017 All employers, or an employer’s agent
Georgia Atlanta FEB 2019 City agencies
Hawaii State-Wide JAN 2019 All employers, employment agencies
Illinois State-Wide JAN 2019 State Agencies
Chicago APR 2018 City departments
Kentucky Louisville MAY 2018 Louisville/Jefferson County Metro Gov; City Agencies
Louisiana New Orleans JAN 2017 City agencies
Massachusetts State-Wide JUL 2018 All employers, state & municipal employers
Michigan State-Wide JAN 2019 State department & certain autonomous agencies
Missouri Kansas City JUL 2018 City may not ask applicants for pay history until they reach an agreed-upon salary
New Jersey State-Wide FEB 2018 State entities
New York State-Wide JAN 2017 State agencies and departments

New York City OCT 2017 All employers, agencies or employees or agents

Albany County DEC 2017 All employers and employment agencies

Suffolk County JUN 2019 Employers and employment agencies

Westchester County JUL 2018 Employers, labor organizations, employment agencies, or licensing agencies
Oregon State-Wide OCT 2017 All employers
Pennsylvania State-Wide SEP 2018 State agencies

Philadelphia TBD All employers

Pittsburgh JAN 2017 City’s agencies and offices
Puerto Rico Commonwealth MAR 2018 All employers

When an employer ceases to rely on salary history of an applicant, it requires making a clear, market-based case for pay, the challenge falls on the employer.  It will be important to create a salary range for each position and ensure that the variations within those ranges are based on things like merit, education, and experience.  Some companies welcome a strictly market-based approach to making salary offers as it has the ability to foster greater transparency.  Whether or not your jurisdiction is covered by the new laws, the trend is increasing and may soon impact your organization.

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.

HOW TO DETERMINE NEW HIRE SALARIES

New Hire Salaries

Without established salary ranges and salary structure, setting a salary can be like spinning the roulette wheel.  Most companies have salary offer guidelines based on competitive market data and established salary ranges for positions.  Ideally, you will have these established tools and practices in place before you have to make a salary offer.  Salary scales are a valuable tool in recruiting and hiring new employees as well as providing baseline amounts in making salary adjustments for existing employees.

There are many things to consider when determining where to set a salary for a new hire including the candidate’s experience and qualifications that are either required or needed for the job, current salaries of employees in the same or comparable worth jobs, salary range, geography, industry conventions, and company budget.  Other considerations may be bargaining agreements, prevailing wage contracts or arrangements, and the company’s compensation philosophy.

To determine accurate external wage comparisons, employers should carefully define the appropriate market and competitive set.  Defining the market too narrowly can result in wages that are higher than necessary. Conversely, defining the market too broadly may cause an organization to set wages too low to attract and retain competent employees.  Paying prevailing wages can also be considered a moral obligation.  This focus on external competitiveness enables a company to develop compensation structures and programs that are competitive with other companies in similar labor markets.  Employee perceptions of equity and inequity are equally important and should be carefully considered when a company sets compensation objectives.  Employees who perceive equitable pay treatment may be more motivated to perform better or to support a company’s goals.

Internal equity is of equal importance to external competitiveness when setting pay.  You want employees to feel they are paid fairly as compared to their co-workers as well as to adhere to regulations regarding pay discrimination.  If starting salaries are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.  Generally, jobs do not have to be identical for equal pay to be required, only substantially equal in terms of skill, effort, and job responsibility, and performed under similar working conditions.  For discriminatory purposes, pay refers to salary, overtime, bonuses, vacation and holiday pay, and all other benefits and compensation of any kind paid to employees.  Pay disparities may be allowed under a seniority system, a merit system, or a system measuring earnings by quality or quantity of production.  Hardly anyone notices when you pay “above average” compared to the outside world, but any perceived deficiency in “internal equity” can come back to bite you.

As you can see there are many factors and considerations when setting pay and it can sometimes feel like a delicate balancing act.  But doing your homework, keeping up with the external market, and addressing internal pay inequities will go a long way to simplifying the task of setting new hire salaries.  It is important to ensure that the approach taken is guided by the compensation philosophy and is applied consistently.  An effective Salary Administration Program allows a company to meet the basic objectives of compensation:  focus, attract, retain, and motivate.

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. This information is 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.