SALARY RANGE POSTING – The states of Colorado, Washington, New York, California, and Rhode Island all have similar requirements regarding posting salary ranges. That is, employers should post the minimum and maximum that they genuinely believe will be paid for the position. There are also several requirements based on the size of an organization. New York requires salary posting for companies with four or more employees. California’s pay transparency requirement applies to companies with at least 15 employees.
RECORD MAINTENANCE – Companies are asked to maintain pay transparency records, including a history of their salary ranges. For example, New York state law requires employers to maintain a “history of compensation” for posted positions and job descriptions (to the extent they exist). Employers should consider assessing how they store, aggregate, and categorize compensation records for each advertised job opportunity or position. Washington, California, and Colorado have enacted similar requirements.
BEYOND COMPENSATION: BENEFITS, BONUSES & EQUITY – Some states, including Washington and Colorado, require posting compensation information beyond salary ranges. Employers of these states must post the benefits offered with the position, including bonuses, equity, and any additional employee compensation. California, however, does not currently require this.
PAY COMPARABILITY PROTECTION – Most states to enact pay transparency legislation have done so in part to protect employees from gender discrimination. These protections forbid employers from the following: “Paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work, regardless of job title, based on a composite of skill; effort, which may include consideration of shift work; and responsibility.” In addition to gender, in 2017, California Senate Bill 1063 added extensions to Fair Pay Act protections to prevent race- and ethnicity-based disparities in pay.
Contact us for additional information on navigating your plan with pay transparency and job posting requirements!
Posting of Ranges – Most Companies Publish Subsets
A review of ranges posted in January 2023 indicates that most companies have opted to post a subset of the range, not the full range. Most advertised ranges present gaps between 20% and 30%. Generally, the difference between the minimum and maximum range is between 40 and 60%.
Why Post the Full Range?
Companies mainly post the full range to avoid potential liability from only posting a subset. It must also be stated that companies who only post a subset may also have to develop a plan to provide the applicant with the full range to avoid a negative hiring experience. Additionally, it is still too early to determine how companies handle hiring requests for the full salary range. Suppose companies are providing the full salary range. In that case, they must ensure a cohesive policy for responding to employee inquiries aligned with the ranges posted in their job ads.
Using Posted Data to Market Priced Jobs
Companies are reviewing posted ranges and using them to adjust their pay ranges; in some cases, they are making these adjustments to be more competitive, but in other cases, they are adjusting their job requirements to align with other postings.
CA’s Labor Commissioner Provides Guidance on Pay Ranges
CA Labor commissioner added interpretations and additional guidelines for pay range. A pay range is what the employer expects to pay an individual. This could be the actual pay or a range. Since the definition does not distinguish between a hiring range and a full compensation range, companies have interpreted that they will be within the new posting requirements if they only post the hiring range.
CA’s Labor Commissioner Releases FAQs.
The California Labor Commissioner’s office released the much-anticipated FAQs on the state’s new pay scale disclosure requirements under the Equal Pay Act, which became effective on 1/1/2023. These FAQs have been added to the DLSE’s guidance for the California Equal Pay Act (Labor Code section 1197.5) and Labor Code section 432.3. There are now 40 FAQs, which are important for all employers operating in CA. Among them:
Concerning compliance, Colorado -one of the first states to pass pay transparency legislation- has seen few compliance issues. Since the legislation took effect in 2019, only a handful of Colorado companies have been fined. In fact, according to a survey conducted by Pay Clarity, about two-thirds of US employers are either planning to or considering disclosing pay rate information in future job listings, even in states and municipalities where they are not required to do so.
Job Descriptions and Compliance
The most difficult obstacle employers will likely face is updating their job descriptions. Given that the New York State law requires disclosure of existing job descriptions, employers should consider updating job descriptions to ensure that the description identifies the position, where it can be—or must be—performed, along with any other information required by this law and relevant to the compensation range or listed salary. As employers review other postings, including ranges posted by other companies, they should compare their descriptions’ requirements and salary ranges and update the job information accordingly.
In summary, pay transparency is emerging as one of HR’s best practices for the near future due to its numerous benefits. In fact, pay transparency is one of the top considerations for Gen Zs when considering where to apply. Firstly, it promotes fairness and equality by eliminating wage gaps and disparities, ensuring employees receive equitable compensation for their work. This transparency fosters trust and engagement, as employees have a clearer understanding of their value within the organization. Moreover, pay transparency enhances internal communication and reduces the likelihood of wage discrimination, contributing to a more inclusive work culture. Additionally, it enables organizations to attract and retain top talent by showcasing their commitment to fairness and providing a competitive edge in the job market. Overall, pay transparency aligns with the principles of social justice and yields positive outcomes for both employees and organizations, making it a crucial HR practice for the future.
2/5/2023
Comp Plan Review: How’s your Comp Plan? Schedule a plan review. Let’s start the Conversation. Contact us
In the last three years, it has been common for HR professionals to face new challenges and opportunities in the ever-evolving world of human resources. Next year will not be the exception. One of the most pressing concerns that many organizations will face in 2023 will be managing labor costs while maintaining a competitive edge and providing employees with fair compensation and working conditions. This can be especially challenging in the current economic climate, where changes in the job market, shifting business strategies, and other factors can impact the bottom line.
Keeping labor costs under control for HR professionals requires a strategic approach that balances the business’s needs with the talent and resources needed to stay competitive. In this post, we highlight easy wins to keep costs under control. Whether you are an HR manager, director, or someone interested in the field, this post will provide valuable insights and information to help you stay ahead of the curve.
Talent and Cost Balancing Strategies for 2023
In conclusion, by implementing strategic measures to save labor costs, companies can maximize their savings and revolutionize their approach to managing their workforce. Embracing technology, optimizing scheduling and staffing, fostering employee engagement, and investing in training and development are just a few strategies that can drive significant improvements in productivity and efficiency while reducing labor expenses. By taking a proactive stance toward labor cost management, businesses can pave the way for long-term success and profitability in today’s competitive landscape. So, why wait? Start implementing these strategies today and witness their transformative impact on your bottom line and overall workforce management.
12/20/2023
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Raise your Company’s Engagement Index: Compensation Strategies That Work!
In today’s rapidly evolving employment market, it is imperative for organizations to place a strong emphasis on their compensation and benefits offerings to engage their existing workforce and attract prospective candidates effectively. Recent research conducted by the Society of Human Resources has highlighted the undeniable influence of compensation as a key determinant of job satisfaction among employees. A comprehensive and competitive package has a direct correlation with higher rates of employee retention and improved productivity. By minimizing turnover and fostering an environment of enhanced morale, productivity, employee satisfaction, and organizational culture, companies can optimize their financial resources and cultivate a more positive and flourishing work environment. So, what are the necessary steps that can help you raise your organization’s engagement index?
Find out what your employees want
Finding out what your employees prioritize will also help determine if your organization is in line with what employees are looking for to better capitalize on the funds utilized for compensation and remain competitive.
One method of determining your employees’ wants and needs is to distribute surveys among a wide variety of staff members. Alternatively, employers could coordinate interviews of focus groups to facilitate open discussion.
During this process, question what your employees’ value and account for variations based on different groups and demographics.
Do an Inventory of the latest Compensation Trends
Studies show job candidates and employees look for a key component: the compensation and benefits package. In addition, several aspects that affect compensation can change over time, such as the size, revenue, or location of an organization or each employee’s role. Therefore, organizations must regularly review compensation and benefits to retain and attract employees. As you review the latest trends, highlight your comp and benefits program under a total rewards strategy. Employees may overlook the value of total rewards programs if they are not presented within the framework of a comprehensive total rewards strategy.
Leverage The Value of Your Employee Benefits
It is important to help employees better understand what benefits are offered to them in order to avoid dissatisfaction due to pay. Once employees clearly understand their total compensation package, they will most likely focus on all the compensation and benefits offered. Remember, 40% of your labor costs are associated with your benefits package. The cost includes not only medical benefits but all employee insurance programs, time-off, pension, and mandated employer-related taxes
Develop A Strategy that blends your organization’s Culture and Value
Once recommendations have been accounted for, account for your organization’s values and pay philosophy. Also, account for the return on investment and how changes could address attraction and retention. Be prepared to act or explain why such benefits are or will not be offered.
Flexible Solutions
To stay relevant and reach a widescale workforce, it is recommended that your organization offers flexible benefits that are customizable to your workforce. For example, there are a lot of different options to choose from when it comes to selecting a benefits package. Some options include health insurance, paid leave, retirement benefits, flexible scheduling, or tuition reimbursement. Also, flexible work arrangements are highly priced by employees: They offer the flexibility and cost-saving options often sought by employees.
Top Performer Benefits
Lastly, consider adjusting your compensation strategy for top performers and those that exceed expectations to further incentive good behavior and increase attraction and retention. Consider offering additional pay or an employee bonus. Employees are more likely to apply or stay at an organization that invests in their performance.
In conclusion, adopting a systematic approach to developing an engaged workforce can yield numerous benefits for companies. By implementing a well-defined process, organizations can create a culture of employee engagement that enhances productivity, fosters loyalty, and drives innovation. This process involves understanding employees’ unique needs and aspirations, aligning goals and values, providing regular feedback and recognition, promoting professional growth opportunities, and fostering a positive work environment. Investing in employee engagement improves job satisfaction and retention rates and directly impacts the company’s bottom line, as engaged employees are more committed, motivated, and willing to go the extra mile. By prioritizing the development of an engaged workforce, companies can position themselves for long-term success in today’s competitive business landscape.
Since Covid-19, the workplace culture has shifted, and employees at record numbers are pursuing remote work opportunities. According to a survey completed by FlexJobs in March of 2022, 77% of its respondents chose remote work as the second highest priority for their total compensation package. The popularity, however, is not shared by the employer community, who often see remote work as a drawback to enhancing work group dynamics. Most recently, a number of articles and studies have also pointed out that the popularity of remote work arrangments and their benefit may impact men and women differently.
FlexJobs surveyed more than 2,100 people between March and April 2021 to gain insight into these new perspectives. These respondents either worked or were still working remotely due to the pandemic.
Among those respondents, 550 were men, and 1600 were women, and while males and females share some similarities in their remote work experiences, some differences were also noted. Among a number of findings, females were more likely to view remote work as a greater necessity than men.
From Positive
Given these differences in opinion, employers may want to review their plans and incorporate their policies’ impact, how they are likely to be interpreted between men and women, and how they may impact the company’s pay strategy.
Compensation Strategies for a remote workforce
As remote work becomes more normalized, employers should consider adjusting their compensation strategy. Addressing remote workers’ pay combats pay equities issues that may arise where employees are over/under-compensated. In addition, recruitment and hiring may become difficult depending on the region where the applicant lives.
There are several strategies employers can take to address employees working remotely in several locations throughout the country.
Pay based on location
There are several approaches an organization can take to pay their remote staff based on location:
Set a pay scale based on the location of the main or corporate office. If multiple offices exist, assign your staff to the pay structure nearest their remote work location.
Pay is based on the pay zone that each employee lives closest to. Utilize a tiered US salary range. Take US national data and adjust based on the area. Add a 10 percent premium to employees who live in the five major metro areas, which include the District of Columbia, Los Angeles, Seattle, Austin, and Boston. Add a 15 percent premium to San Francisco and New York City employees since they live in a location with the highest cost of living and labor.
Utilize national data to set pay levels. This is recommended if the cost of living is similar to the national average.
Performance Based
Consider paying your staff based on their role and level of experience rather than their location. Pay should be based on job responsibilities and capabilities.
To accommodate this structure, a matrix can be developed to account for growth and the level of experience and skills.
Carve-Outs
Some jobs are in high demand and may be more critical than others. Consider carving certain classifications and setting a different pay structure for those groups so that they can remain competitive.
Equitable Pay
Employers need to communicate and document reasons for pay decisions due to remote work or performance, and employees need to be mindful of anti-discrimination laws to ensure that workers, including those within a protected class, are compensated equitably.
Define What Works for Your Organization
It is important to define your pay philosophy and structure clearly and what makes sense for your organization to help guide expectations. In addition, a competitive compensation philosophy can help attract and retain your workforce.
Also, consider the cost and administrative implications. For example, the financial impact for smaller organizations can be greater than a Fortune 500 company.
In summary,
As you navigate the societal issues around remote work, gender differences, and your organization’s needs, keep in mind that equality benefits everyone.
Courtney Geduldig of S&P Global summed it up best when she explained that “one of the biggest misconceptions about gender equality is that it only benefits women, but the data shows that this is not true.”
With companies focusing on recovery efforts following a pandemic, gender equality may recede in priority. Other priorities will inevitably emerge, but eliminating discrimination should never be put on hold.
By being proactive and aware of imbalances, businesses can become leaders against gender discrimination in all workplace settings.
