Showing posts with label salary. Show all posts
Showing posts with label salary. Show all posts

Tuesday, September 12, 2017

Discussing Pay at the Office

Many employers restrict their employees from conversations about pay at the office, but is this legal?

It is a common practice in many companies for the employee policy manual to contain some verbiage about not discussing compensation and pay with other employees. This policy is easily agreed to by the employees and thus the company has achieved its goal of keeping the often times illegal practice of pay secrecy in place.

Is Pay Secrecy Illegal?

In 1935, Congress passed a law entitled, the National Labor Relations Act or the “Wagner Act”. Under this act, private-sector employees have the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” For this reason, restricting private-sector employees from discussing their compensation with one another is illegal. There is a limit as to who can discuss pay with other employees. Supervisors, for example, would not be considered an “employee” and therefore they can be prohibited from discussing pay. In addition, employees who have access to a company’s payroll could also be prohibited from sharing other employee’s private salary information.


Why is the Wagner Act in Place?



It was the purpose of the Wagner Act to protect employees against unfair pay practices. Giving the employees the freedom to discuss their compensation does a lot to help avoid unfair pay practices and puts pressure on a company to ensure pay-for-value (pay based on experience, education, skills, and the assigned responsibilities of the job) is in place. If an organization has a pay-for-value system in place, then they would not be afraid of employees discussing their compensation with each other. It is when a company has something to hide within their pay practices that problems arise when pay is discussed.

Employers Who Violate This Law

Employers who violate this law could have repercussions that would range anywhere from a wrongfully terminated lawsuit to the possible loss of federal contracts.

If an employee has been wrongfully fired for discussing their pay, they are may contact the National Labor Relations Board (NLRB) and file a complaint. The NLRB may begin an investigation into the matter regarding their former employer.

In most cases, pay secrecy is against the law. Employer should have a pay-for-value system in place and avoid any possible penalties for violating the Wagner Act.




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Friday, May 20, 2016

New Overtime Rule and You

New overtime rule could very likely affect your job directly or even indirectly

The United States Department of Labor has released the final rule on changes being made to overtime pay. This rule will be effective December 1, 2016.

Previous Rule:

If you were considered an exempt employee and got paid an annual salary of at least $23,660, you were not eligible for overtime pay if you worked more than 40 hours in a work week.

New Rule:

If you are considered an exempt employee and get paid an annual salary below $47,476 and above $23,660, you could now be eligible for overtime pay if you work more than 40 hours in a work week.

Options for the Employer:

Employers could respond to this new overtime rule in a variety of ways:
  1. Employers could begin paying overtime pay to the employees who now fit the new criteria. This could lead to a raise in cost of the organizations products/services.
  2. Employers could raise salaried employees pay to the new minimum of $47,476. This could lead to a raise in cost of the organizations products/services.
  3. Employers could reclassify the exempt salaried positions to full-time hourly positions. This would limit the ability of employee being able to work additional hours to accomplish their assigned duties.
  4. Employers could eliminate the affected positions that would otherwise be considered eligible for overtime pay. This would require the employer to redistribute those job duties to other employees within the organization.
  5. Employers could eliminate the affected positions and replace each of those positions with two part-time employee positions. This would also enable the organization to save on paying full-time benefits.
In order for a worker to be exempt from overtime, they must meet the criteria. For example, performing "executive" duties means supervising the work of two or more employees and "administrative" duties requires the exercise of discretion and independent judgment. For more information, please review the Department of Labors fact sheet on overtime exemption.

If you feel that you work in a position that could fall under these new overtime rules, please consult your Human Resource department or immediate supervisor. As always, be sure to review your state specific overtime rules.

These new overtime rules will have effect an estimated 4.5 million workers and have a residual effect on their co-workers and products/services.

Here is the new overtime rule as stated by the Department of Labor:
Key Provisions of the Final Rule
The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:
1.    Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
2.    Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
3.    Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.
Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.






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