Over the past few volatile years, the war for talent has meant that companies will often prioritize hiring at any cost. While many have increased salaries for new hires, few gave corresponding increases to current employees—giving rise to a compensation issue called pay compression. Pay compression is what happens when there is little difference between the wages earned by a tenured employee and newcomer, or between a junior- and senior-level employee working within the same job family. If left unchecked, pay compression can lead to higher turnover, lower productivity and the erosion of employee morale and organizational trust. But as we move into an economic downturn, with a greater emphasis on capital efficiency and cost reduction, many companies are encountering a difficult challenge: How can we remediate pay compression problems without an ample budget to give out pay increases? READ MORE
Bernie Sanders calls for four-day work week ‘with no loss of pay’
Americans would work four days a week “with no loss of pay” if Bernie Sanders had his way.
The independent senator from Vermont touted a British pilot project in which some companies experimented with a four-day workweek. READ MORE
New survey indicates US wage growth will slow
Companies are expected to dole out smaller raises this year, at least according to a leading research firm. And that could be good news.
Normally, robust wage growth is a good thing for workers’ wallets and the economy. READ MORE
Intel says pay cuts are ‘temporary,’ will begin reversing them later this year
Intel told employees Wednesday that cuts to wages and bonuses the company announced last month were temporary, and that the company plans to begin restoring full pay before the end of the year. READ MORE
Companies can't enforce silence for severance pay, Labor Board rules
Companies can no longer offer severance agreements that prevent employees from making disparaging remarks about their former employer, the National Labor Relations Board ruled Tuesday.
The big picture: The federal agency said these agreements require employees to waive their rights under the National Labor Relations Act, and that such policies are a violation of the act. READ MORE
The best way to close gender pay gaps is to find the source of unfair pay
Businesses can close gender pay gaps, reward high performance and improve their compensation strategy by identifying the true source of pay inequity and fairly allocating raises to the most underpaid women, according to new research.
The researchers have developed their approach in collaboration with dozens of businesses around the world ranging from 75 to 130,000 employees, supporting most firms in closing the gender pay gap either immediately or over the course of just a few years. READ MORE
Gen Z women entering the workforce have low pay expectations, showing little has changed since the boomer generation
Gen Z isn’t dodging the pitfalls of pay equity issues as they enter the workforce.
Women, it seems, fall behind on compensation even before their first professional job, according to a new report from Handshake, a career app aimed at Gen Z. On average, those surveyed in the class of 2023 reported they consider $82,000 a high, achievable starting salary. READ MORE
Justices OK overtime pay for $200,000-a-year worker
The Supreme Court ruled Wednesday that an energy company employee who earned more than $200,000 a year still qualified for overtime pay under a New Deal-era federal law meant to protect blue-collar workers.
By a 6-3 vote, the justices sided with Michael Hewitt, who was a “tool-pusher” supervising 12 to 14 workers on an offshore oil rig. Hewitt was paid a minimum of $963 for any day he worked as part of an unusual schedule on the oil rig. READ MORE
Executive Bonuses Require Plans for Nonstatutory Stock Options
It’s that time of year when many executives receive their bonuses and when tax advice is needed on the best way to cash in on those bonuses—especially stock options.
Stock options are a right to purchase stock at a specified price. There are two types of stock options: statutory stock options, commonly referred to as incentive stock options, and nonstatutory stock options, also called nonqualified stock options. READ MORE
Judge asks if Musk's $56 billion Tesla pay hangs on a legal 'kill shot'
A trial challenging Elon Musk's $56 billion pay at Tesla Inc (TSLA.O) may hang on whether a single material misleading disclosure to shareholders would void the compensation plan, which the judge hearing the dispute called "a kill shot."
At Tuesday's closing arguments in a Delaware court, a judge pressed lawyers representing Tesla directors and the investor challenging Musk's pay over whether the company's explosive growth outweighed misleading disclosures about the pay plan in 2018. READ MORE
Compensation Is Hitting Its Digital Transformation Moment
Compensation is experiencing its digital transformation moment.
What is the full value of my compensation? How was it determined, and by whom? Am I paid competitively in the market? With the 2022 merit and bonus season behind many of us, and a year of looming economic uncertainty ahead, more employees and companies across America are asking hard questions about compensation than ever before. READ MORE
Managing The Rising Cost Of Labor
Of the many challenges facing the restaurant industry today, the rising cost of labor is one of the most formidable. According to the U.S. Bureau of Labor Statistics, average hourly earnings in food and drinking establishments jumped from $15 in 2018 to $19.42 in 2022. Factors contributing to this trend include the ongoing labor shortage and recent increases in federal, state and local minimum wage requirements. In a recent survey by FSR magazine, restaurant operators were asked to name their most significant challenges. The top three answers were food costs (92%), labor costs (89%) and energy and utility costs (63%).
To address this challenge, restaurants should calculate and track their labor costs and consider strategies for controlling them. READ MORE
Employers Are Rebalancing Pay Strategies in a Precarious Economy
Today, Payscale Inc., the leading provider of compensation data, software and services, released the results of its flagship survey, the 2023 Compensation Best Practices Report (CBPR), shedding light on the ongoing power struggle between employees and employers. The largest report of its kind on compensation trends and total rewards, this year’s CBPR examines how employers can elevate their compensation management strategy to rebalance the employee experience in a precarious economy and the age of pay transparency. READ MORE
Most workers are getting raises this year, survey finds
Looks like a lot of folks may be getting raises this year, according to a Payscale survey out Wednesday morning.
Why it matters: Who doesn't love a salary increase? These numbers look big, but more employers are unsure about their plans in 2023 than last year. And with inflation running at around 6% in the U.S. year over year, some workers are barely keeping pace. READ MORE
Musk's $55B pay package continues to be scrutinized in court
Elon Musk's massive pay package from 2018 is still under scrutiny in a Delaware court.
Attorneys for a Tesla shareholder urged the judge on Tuesday to invalidate a 2018 compensation package awarded by the company’s board of directors that is potentially worth more than $55 billion. READ MORE
The SEC Continues its Efforts to Improve Option Grant Practices
The SEC’s recent Rule 10b5-1 rulemaking has drawn attention to its efforts to crack down on illegal trading by corporate insiders. (See our related post here.) But less attention has been paid to part of the rulemaking that will likely impact every public company’s option grant practices. READ MORE
What are “Double-Vest” RSUs and Why Are They Making Headlines?
Double-vest restricted stock unit awards (Double-Vest RSUs)1 made headlines a few years after the end of the Great Recession when they were awarded by pre-IPO tech giants. Since that time, it has become increasingly common for mature startup companies and other high-value pre-IPO companies, primarily in the technology industry in the United States, to award Double-Vest RSUs in lieu of, or in addition to, stock option awards to attract and retain talent.2
Fast-forward more than a decade and Double-Vest RSUs are again making headlines, but this time because the expiration date of older Double-Vest RSU awards is approaching at the same time that many companies may be confronted with less access to capital markets, coupled with pent-up desire for liquidity by employees. READ MORE
Low wages linked with elevated mortality risk for middle-age workers in the US, study finds
Middle-age workers who tend to earn a low wage have an elevated mortality risk, especially when they experience unstable employment, according to a study published Tuesday in the medical journal JAMA.
Researchers from Columbia University’s Mailman School of Public Health tracked employment and health metrics for about 4,000 workers in the US across a 12-year period, using data from the University of Michigan’s Health and Retirement Study collected between 1992 and 2018. All participants were at least 50 years old at the beginning of the study period and in their 60s at the end. READ MORE
Design Thoughtful Scorecards for ESG Measures in Incentive Plans
Organizations are facing increasing pressure to consider whether environmental, social and governance (ESG) and human capital management (HCM) have a place in their compensation programs.
Semler Brossy’s “2022 ESG + Incentives ReportOpen in a new tab” found that 70% of the S&P 500 companies already have ESG and HCM metrics in their incentive program, a 23% increase from last year. Despite the rising external pressure, companies need to first identify top ESG and HCM priorities that are material to the overall strategy and establish a set of performance goals for these priorities. READ MORE
How in-house counsel can navigate pay disclosure laws
On November 1, 2022, one of the most wide-ranging laws related to salary transparency went into effect in New York City. Businesses hiring workers in the city are now required to list the minimum and maximum salary range for a job on any printed or online posting.
The goal of the new law is to provide workers with more information regarding an employer’s pay practices so they have greater leverage to discuss and negotiate their salaries. READ MORE