(Post written by Rick Dacri, March 28, 2016)
There are times when paying competitive wages is not enough. The General Manager of a public power utility called me recently. He was having difficulty in both recruiting and retaining electrical engineers and experienced line workers. The feedback he was receiving was that his pay program was out of line with other electrical utilities. I was ultimately engaged to conduct a market analysis of their wages. The results were startling to him and his board—their wages were competitive with other public utilities within their market. How could this be? They found this incredulous.
A new reality has entered the marketplace. In some situations, paying the market rate is insufficient. The unemployment rate is plummeting. It is Continue reading
(Post by Rick Dacri, February 10, 2016)
While conducting an analysis of one on my client’s benefit’s package, we were asked if we have you seen any trend toward Personal Time Off (PTO), combining vacation and sick leave into one combined benefit?
Here’s what we answered: Continue reading
I am regularly asked the difference between exempt and nonexempt and whether that means the same as classifying someone as salaried or hourly. In this 3 minute video, I explain how to properly pay and classify your workers. I will explain when someone should be classified exempt, nonexempt, salaried or hourly and how to conduct the Fair Pay Test required under the Fair Labor Standards Act (FLSA).
Other posts that might interest you:
(Webinar by Rick Dacri, November 12, 2016)
I recently lead a webinar focusing on compensation trends, what we can expect to see for pay raises in 2016, the expected doubling of the minimum salary for exempt employees in 2016, and how to eliminate some costly wage & hour violations.
If you would like to hear or part of this 57 minute webinar, click Dacri Compensation Webinar.
Let me know what you think in the comment section below and let me know what percentage increase for pay raises your company expects to give in 2016.
(Post by Rick Dacri, November 2, 2015)
Pay increases for 2016 are expected to remain at 3%, the same as 2015 and up from 2014’s 2.5%. Exceptional performers are likely to enjoy increases in the 4.5% range.
Regionally, wages should be higher in the Northeast. Critical, hard to find and retain positions, such as electric and software engineers, line workers, nurses and IT will demand and get more.
Employers continue to find it difficult to recognize and motivate workers with merit budgets of only 3%. It is nearly impossible to differentiate between good and average performers with so little money. As a result, more are turning to annual short term incentive plans. These plans can quickly put cash in worthy employee’s pockets and not impact base wages. Employers are also putting more dollars into benefits, particularly into supplemental retirement plans for “older” workers.
In addition to compensation, companies are relying upon non-monetary rewards including career development, education and more exciting and challenging work assignments.
If you would like to explore options for your company, call me at 207-229-5954 or firstname.lastname@example.org.
Other posts you may like:
- Compensation Trends & Pitfalls (Webinar)
- Overtime Eligibility to Double: Prepare for Changes
- FLSA: Record Keeping Requirements
Proposed changes in the Department of Labor overtime rules will force you to make significant changes to your pay and benefit structure; a changing economic market is driving wages upward; and an increasing number of wage and hour lawsuits has all put compensation at center stage.
In this one-hour webinar, scheduled for November 12th at 2PM, Rick Dacri will show where wages are going in 2016; how to prepare for the 2016 proposed changes to the overtime rules; and how to avoid the most common wage and hour violations.
This webinar is designed for all executives, managers, supervisors and HR professionals—anyone who supervises staff.
In this 60-minute webinar, you will learn:
- What the expected pay increases will be in 2016
- What will be the important 2016 compensation trends you should know
- How to remain competitive when new hires are driving pay upward
- Strategies to address the proposed doubling of the overtime minimum
- A definitive way to differentiate between a salary and hourly position
- Understanding if you must pay someone who does work on his or her time
- Knowing when you can deduct pay from a salaried worker
- Methods to correct mistakes in employee’s pay
- Pay requirements when employees work through lunch, at home, or before the start of a shift
- Avoiding mistakes in paying Independent Contractors
- Whether you can prevent employees from discussing their pay
These are just some of the things we will cover in this packed webinar. In addition, by attending, you will also receive a copy of the PowerPoint slides and 3 white papers (Understanding Exempt Status under the FLSA; FLSA Fair Pay Questionnaire; and Improper Deductions of salaried workers).
The entire program is just $125 (my clients will receive a complimentary pass). To enroll, simply email (email@example.com) or call me (207-229-5954). It’s that easy. I’ll take your information and you can send me a check.
Got questions? Give me a call and I’ll give you an answer.
Sound good. Then sign up now…and tell your colleagues too!
You may want to read:
Compensation Trends and Pitfalls: What You Must Know and Do
(Post by Rick Dacri, October 15, 2015)
What and how you pay your workers is becoming a major issue managers are being forced to address. The ability to recruit and retain star employees is driving wages upward. And both the states and federal government are zoning in on wage violations, while at the same time proposing stricter, more costly guidelines.
In this post, I will outline some key compensation trends and the potential pitfalls which could prove very costly to you and your organization.
- Wage Growth: expect to see a steady increase in wages. In 2014, we saw a 2.5% increase followed by 3% this year. Plan on another 3% in 2016. The Northeast has been experiencing greater growth and certain positions, such as electrical engineers, IT, line workers and nurses are demanding and getting greater increases. Review all your wages to ensure they are in line.
- Wage Equity: Recruitment is impacting existing wage programs. The need to pay job candidates higher wages than your current employees to get them to accept your job offer is throwing internal equity out of whack. Employers must remain competitive to attract talent, but you must also maintain parity so as to retain your current employees. It’s a difficult balancing act. Review your compensation program to insure you have both internal and external competitiveness and equity. As a best practice, this type of study should be done every 2 years. (As an aside, I have been asked to conduct several compensation reviews and analyses just this year).
- Wage Violations: There are a wide range of wage regulations that are getting significant attention. The Fair Labor Standards Act (FLSA) is one of the employment laws that employers frequently violate, often without intent and knowledge that they have gone afoul of the law. Unfortunately, intent is not a good defense and the consequences are severe and include 2-3 years back pay for each infraction, legal fees and in extreme cases, criminal penalties. Here are some of the problem areas:
- Misclassification of salaried workers (exempt versus non-exempt): You cannot simply pay an individual a salary to avoid paying overtime. The Department of Labor has developed a complex testing process to determine whether a job is legitimately exempt or not. You should review and test all your salaried positions to ensure they meet the requirements. Here is the DOL link to the test. Call me if you need help.
- Prohibited deductions of exempt employees wages: You cannot arbitrarily reduce the wages of an exempt worker for missing work or leaving early to go to the dentist. In doing so, you jeopardize the position’s exempt status and frankly, open up a huge can of worms. I have developed a white paper on making proper deductions. Give me a call and I will send it to you.
- Failure to pay for all time worked: This is a big problem. While Wal Mart continues to grab the headlines for these violations, I regularly get calls from clients on my HR HelpLine concerning obligation to pay for work done off the clock, work being done during breaks, eligibility for comp time (both for municipal and private sector workers), requiring workers to be on-call, storm closings, travel pay, and expecting all workers to monitor and respond to emails and calls 24/7. Review your policies and procedures to ensure employees are properly paid.
- New Proposed White Collar Regulations. The DOL is proposing to increase the means test requirement (that’s the minimum dollar amount you must pay a salaried worker) to $50,444, up from $23,660. If this passes for 2016, and many experts believe it will, that will double the amount required. Prepare now by reviewing every exempt worker you have; determine whether they fall below the threshold; and then develop a strategy around how you will deal with this issue. There are a variety of options. Call me if you need help.
- Independent Contractors: For the last few years, the various states, IRS and DOL have been hammering employers who employ Independent Contractors. In many cases they have declared these contractors as employees and have required employers to pay back pay, back taxes, workers comp, unemployment comp, and back benefits to the workers. Each state has their own tests and the IRS has another. Before you hire an Independent Contractor, test the position. Here’s the IRS test.
- Student Interns: While most unpaid student interns meet the required educational standards, DOL has been clamping down on abusers. Follow the 6 criteria point test to ensure you are not in the wrong.
Listed above are just some of the trends and pitfalls. What you should do now includes:
- Auditing your compensation and pay practices today.
- Making sure your entire compensation program is up-to-date, compliant and competitive.
- And, If you need assistance, give me a call.
Other Dacri posts you should read:
- FLSA Record Keeping Requirements
- How to Comply with Massachusetts Minimum Wage Increase
- Linkedin Gets Burned for Overtime Violations
- Overtime: Should Holidays and Vacation be Included?