Wage growth continues to outpace inflation

We got the latest inflation numbers — the Consumer Price Index — for October this morning. CPI increased 0.2% month over month, and prices were 2.6% higher in October than they were a year ago. For the most part, the pace of price gains has been gradually slowing since inflation hit a pandemic-era peak of 9% in June 2022. 

But wages have also been increasing at a pretty steady pace. Average hourly earnings growth surpassed the rate of price growth back in May 2023, which means Americans’ real earnings have been improving.  READ MORE

Department of Labor’s Salary-Threshold Increase Faces New Legal and Political Challenges

The United States Department of Labor issued a final rule on April 23, 2024 that increases the minimum salary threshold for the FLSA’s familiar white-collar overtime exemptions. Effective, July 1, 2024, the salary threshold for exempt workers increased from the previous rate of $684 per week (i.e., $35,568 annually) to $844 per week (i.e., $43,888 annually). The changes don’t end there. Under the DOL’s final rule, the salary threshold will again increase on January 1, 2025, up to $1,128 per week (i.e., $58,656 annually). The rule also provides for automatic increases every three years based on up-to-date wage data. READ MORE

More states now have pay transparency laws. Here’s the effect they’re having

In the past few years, a growing number of states have put laws on their books requiring employers to disclose pay ranges for open positions — either in their job postings or during the hiring process.

Today, Washington, DC, and 13 states have pay transparency laws in place: California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont and Washington. Most are already in effect, but the laws in four of those states (Illinois, Massachusetts, Minnesota and Vermont) won’t take effect until next year. READ MORE

How Tying Executive Pay To Human Capital Metrics Drives Profit

Deloitte’s recent research indicates that nearly 90% of executives want their compensation tied directly to human capital performance metrics. This isn’t just a reaction to market trends; it signifies a strategic acknowledgment of human capital’s essential role in driving economic value-creation. With a new administration potentially incentivizing short-term profit at the expense of sustainable people investments, this executive commitment highlights a critical truth: human capital remains the cornerstone of long-term profitability and competitive edge. This is especially true in the US, where 80% of our economy is driven by services, and people are critical in delivering services that drive revenue. READ MORE

Americans Want Job Ads To List Salary

When searching for a new job, there are numerous factors to take into consideration—the demands, the hours or even the location. But according to a recent survey, one of the most important things that Americans want listed on a job ad is the salary.

A new survey conducted by Talker Research revealed that 86 percent of Americans think a job advertisement should note the salary for the role. In contrast, just 8 percent think it's not a necessary addition. READ MORE

Americans’ debt is growing — but so are incomes

Americans are continuing to pile on debt at record levels — but for many households, those IOUs are completely manageable, according to new data released Wednesday.

US household debt (not adjusted for inflation) moved up to a fresh record total of $17.94 trillion as of September 30, according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit. READ MORE

10 industries with the worst salary transparency

Many companies are still hesitant to post salaries in job postings.  According to a study of more than 4,000 live LinkedIn job listings in the US, over a third (36%) didn't include salary details, even in states that have passed salary transparency laws. 

People Managing People analyzed active job postings across every U.S. state over a range of seniority levels including associate and junior roles, as well as senior positions, across 22 different sectors.  READ MORE

MoneyWatch How much money do U.S. senators make? Hint: Their salaries haven't budged in 15 years.

U.S. lawmakers have come a long way since making $6 a day in 1789, but their six-figure annual salary has remained frozen in time since 2009. 

The current annual salary for a U.S. senator — as well as members of the U.S. House of Representatives — is $174,000. The government-paid salary, set in 2009, reflects a $4,700 pay bump from 2008, but has not been raised since.  READ MORE

ISS Issues October 2024 Update to its Executive Compensation Policies FAQs

In October, Institutional Shareholder Services (“ISS”) released an off-cycle update to its Executive Compensation Policies Frequently Asked Questions (the “FAQs”), which are available at this link: US-Compensation-Policies-FAQ.pdf (the new questions are highlighted in yellow). As described in more detail below, the updates to the FAQs address ISS’s criteria for recognizing “robust” clawback policies and realizable pay methodology. The FAQs are typically updated in November or December of each year, making this off-cycle update noteworthy. ISS indicated in its release that a subsequent update to the FAQs is expected in December 2024. READ MORE

Biglaw Lateral Partner Compensation Guarantees Are All The Rage Again

Everything old is new again. That’s more than some cliche thrown at you by an aging millennial lamenting the return of low rise jeans. It’s also descriptive of Biglaw’s stance on lateral partner compensation. Law.com has an article explaining that multiyear guarantees — whether in guaranteed points, shares, or specific amounts — are back again for partners they’re hoping to lure to the firm. READ MORE

The gender wage gap increased for the first time in 20 years. It’s time to pay attention to ‘emotional labor’

This is the first time in more than 20 years the pay gap increased between women and men, according to new census data. While many factors lead to inequitable pay between the genders, looking at invisible work and emotional labor is the one aspect that can be addressed at home and in the workplace.

The gender wage gap isn’t just about salary. Society places too high of expectations and too low of value on the contributions of women. As a result, we have more than just a wage gap. Women feel burnt out and overwhelmed while being unfairly compensated for their work. READ MORE

By the Numbers: How Companies Pay Execs They Promote to CEO

Choosing the right candidate to fill the corner office comes with a unique set of challenges. Putting aside the search for expertise and business acumen, leadership style, cultural fit, and a host of other considerations, one consistent — and expensive — factor is, of course, compensation for newly appointed chief executive officers (CEOs).

WTW’s Global Executive Compensation Analytics Team (GECAT) explored promotions among S&P 100 companies since 2020 to identify typical practices followed when promoting a new CEO from within the existing executive team. This analysis, different from the GECAT’s recent analysis of pay for interim CEOs, revealed the circumstances for each company and the different approaches taken. Here’s what the team found, by the numbers. READ MORE

Orgs May Soon Take Stock in Pay vs. Performance Data

The new pay vs. performance (PVP) disclosure requirement from the U.S. Securities and Exchange Commission (SEC) has not made a big splash yet, but it still has the potential to reshape the executive pay landscape as time goes on. Investors and proxy advisors are still in “wait and see” mode around whether the disclosure is useful. The missing link to make sense of the requirement is time. The disclosure is, for the most part, meaningless until investors can look at the trajectory of pay over a CEO’s entire tenure. As time passes and more data is disclosed, that will be possible.  READ MORE

Disabled Workers Deserve More Than Subminimum Wage

When I became Disabled in my late teens and started searching for work, I was confronted with barriers including disability discrimination, inaccessible environments, and attitudinal biases. I lost a job simply because a no-cost adaptation was rejected. My story isn’t unique. And it’s just one example of how systemic barriers prevent Disabled people from accessing meaningful employment.

Another huge one: a nearly 90-year-old federal law from the Fair Labor Standards Act (FLSA) that allows employers to pay Disabled people less than the minimum wage, sometimes just cents on the dollar. At last, Congress is seriously considering legislation that would end this relic of the New Deal, better known as Section 14(c), which confines Disabled people to a lifetime of poverty and segregation.  READ MORE

Massachusetts could be the next state to get rid of the ‘subminimum wage’ for tipped workers

The federal minimum wage for tipped workers has stood at US$2.13 an hour since 1991. Back then, it amounted to half the $4.25 regular minimum wage. But Congress has failed to increase the tipped minimum while periodically raising the regular wage floor. Today, the tipped rate is less than one-third of the $7.25 federal full minimum wage.

As of October 2024, 30 states and Washington, D.C., had instituted their own, higher, regular minimum wages. The number of states taking this step keeps rising in part because Congress hasn’t raised the federal minimum wage since 2009. Over the years, many states have also adopted higher wages for tipped workers. Seven states have no tipped minimum wage at all, which means that employers must pay at least the state-mandated minimum wage to all workers, including those who earn tips. READ MORE

US president's salary has people saying ‘it makes no sense’

The United States of America is about to vote for its new president, with millions heading to the polls to vote either for Donald Trump or Kamala Harris to succeed Joe Biden in the Oval Office.

And while either Harris or Trump will be the metaphorical leader of the free world, they will also be - on a very basic level - an employee of the US federal government.

It is a job that is very much one that comes from a point of passion - but there's still a salary to be paid for doing what they do. READ MORE

End your compensation team’s pay transparency torment

Increased regulatory requirements have consistently been identified as a top driver for organizations to increase communication about their pay programs, according to participants in WTW’s 2024 Pay Transparency Survey. Unfortunately, several factors related to sharing pay information (beyond what employees get in their paychecks) are tormenting most compensation departments.

But there is a path to tranquility. READ MORE