Hot Topics in Total Rewards

  • 09 Sep 2019 4:07 PM | Bill Brewer (Administrator)

    Posted on 09.06.19 // by Michelle Cammayo // Compliance

    Employers who have not yet implemented the new training requirements discussed in our original blog post back in October of 2018 (found here) received welcome news over the weekend as Governor Newsom signed SB 778 into law delaying the training requirements to January 1, 2021.

    What does this mean? The extension addresses employers’ confusion with compliance training deadlines for those trained in 2018 or 2019. Employers now have an additional 12 months to train employees under the new anti-harassment training regulations.

    Which employers are affected? Employers with 5 or more employees.

    What if I already trained my employees using the new requirements? For employers that have provided the new training in 2019, the employer is compliant with the training and is not required to provide it again until 2 years thereafter.

    For employers that trained in 2018, there is an opportunity to train in 2020 instead of 2019 as would have been necessary prior to the extension in the deadline.

    What if I haven’t yet trained my employees?  Good news!  The deadline to comply has been extended 12 months to January 1, 2021. To read more of the new anti-harassment training requirements, go to: https://boltonco.com/2018/10/03/california-governor-jerry-brown-signs-law-updating-sexual-harassment-training-requirements/

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    Source: Bolton & Company

    https://boltonco.com/2019/09/06/california-sb-778-delays-expanded-sexual-harassment-training-requirements-to-january-1-2021/

  • 06 Sep 2019 1:19 PM | Bill Brewer (Administrator)

    AUTHOR

    Valerie Bolden-Barrett

    PUBLISHED

    Sept. 3, 2019

    Dive Brief:

    • Delivery app DoorDash joined ride-hailing platforms Uber and Lyft in committing a total of $90 million in support of a ballot measure to oppose a California bill that could force them to reclassify contractors as employees, according to a statement from DoorDash and reporting from Bloomberg
    • In May, the California State Assembly passed Assembly Bill No. 5 (AB-5), which would make certain components of the Dynamex Operations West, Inc. v. The Superior Court of Los Angeles ruling state law in California. The three companies oppose that bill. "Achieving a legislative solution is our top priority, but should the legislature fail to act, we will be left with no choice but to pursue a ballot initiative," DoorDash Head of Public Policy Max Rettig said in the statement. 
    • According to DoorDash, any ballot measure they would initiate would: 1) give workers the freedom to dictate "when, where and how long" they want to work; 2) provide gig workers a minimum pay standard, with tips added on top of their pay; 3) create "new benefits"; and 4) protect gig workers from sexual harassment and discrimination. 

    Dive Insight:

    AB-5 is California's attempt to codify the "ABC test" for classifying workers established by Dynamex in 2018 into state law. According to the Dynamex ruling, workers are considered employees unless they meet the three conditions of the test: 1) workers must be free of control and direction from the hiring entity in performing their work; 2) workers must perform tasks outside the hiring entity's normal business; and 3) workers must be engaged in an independently established trade, occupation or business of the same nature as the work performed. If passed by the state Senate, AB-5 would change the employment status or more than one million California workers, the Los Angeles Times said

    The argument these companies have made for the flexibility of gig work comes as contract work has become a more common way to make a living. However, the push is set against the backdrop of recent allegations that Uber, Lyft and DoorDash treat contract workers unfairly. Last January, Uber paid $1.3 million to a class of workers claiming misclassification. DoorDash has faced recent criticism of its tipping model for "dashers," and it subsequently drafted a new pay policy that is slated to launch this month, according to the Verge

    Thousands of gig workers in California have sent letters to Gov. Gavin Newsom and legislators asking them to support their independent contractor statuses, the DoorDash press statement alleged. Notably, the LA Times reported that Uber and Lyft promised drivers extra pay to speak out against AB-5. 

    Employers looking to hire independent workers should check state laws to make sure their employment practices comply. Otherwise, employers might need to reclassify certain workers. Reclassification could nullify their reasons for hiring gig workers in the first place ⁠— such as keeping employment costs down and adjusting staff as needed.

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    Source: HR Dive

    https://www.hrdive.com/news/doordash-uber-and-lyft-commit-90m-to-oppose-california-independent-contra/562086/
  • 06 Sep 2019 1:15 PM | Bill Brewer (Administrator)

    By Alex Wolmart
    United States | Aug 28, 2019 at 11:29 am


    The U.S. workforce knows its worth.

    A new study from the California-based staffing firm Robert Half International shows 82% of professionals feel informed about the amount they should make in their current role while 73% compared their salary with market rates.

    More than half (54%) admitted to comparing compensation with coworkers, the study found. Less than half (47%) feel they are paid enough for the work they do, even though the level of salary research is rising.

    “Workers have more access to information about their salaries, roles and career options than ever before, arming them for conversations with current and potential employers,” Paul McDonald, senior executive director for Robert Half, said. “Managers must remain equally knowledgeable, regularly evaluating salaries to ensure they’re paying at or above market rates to recruit and retain highly skilled talent in today’s competitive hiring market.”

    McDonald said talented employees are likely to stay at a company if they feel they’re fairly compensated.

    Additional findings:

    • More men (87%) feel well-informed about how much they should make than women (76%);
    • Half of the women surveyed feel underpaid compared to only 41% of men;
    • Nationally, 57% of professionals feel a stronger economy has helped their earning potential;
    • About two thirds (67%) of workers 18-34 have talked about their salaries with colleagues, compared to 54% aged 35-54 and 38% for those 55+.

    Over a thousand workers across the country and 2,800 in 28 U.S. markets were surveyed, Robert Half said.

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    Source: ROI-NJ

    https://www.roi-nj.com/2019/08/28/finance/money-on-the-mind-study-finds-majority-of-workers-know-their-worth/
  • 20 Aug 2019 11:13 AM | Bill Brewer (Administrator)

    Image result for California law

    By ADAM BEAM 

    Updated: 11:03 PM PDT Jul 30, 2019

    SACRAMENTO, Calif. —

    Heterosexual couples now have an alternative to marriage in California. Democratic Gov. Gavin Newsom signed a law on Tuesday that lets straight couples register as domestic partners.

    California has recognized domestic partnerships since 2000. But the law only applied to same-sex couples who, at the time, were not allowed to get married. The law's goal was to give same-sex couples the same legal protections as marriage.

    In 2015, a U.S. Supreme Court ruling effectively legalized same-sex marriage nationwide. The ruling had no effect on the state's domestic partnership law, giving same-sex couples the choice of getting married or filing as a domestic partnership.

    Same-sex couples -- except for those older than 62 -- still had just one option: marriage. That changed Tuesday, when Newsom signed a law authored by San Francisco Democratic state Sen. Scott Wiener.

    "Couples should be able to protect their relationships under the law by registering as domestic partners, without being forced to marry," Wiener said in a news release. "(This law) brings long overdue parity to same-sex and opposite-sex couples."

    After same-sex marriage became legal, some states either got rid of their nonmarital statuses or converted them to marriages. But Wiener's office said some couples prefer domestic partnerships because they "are not associated with traditional gender-differentiated roles" and don't have "the same historic and cultural connotations that some people may find undesirable."

    Other couples, Wiener said, might prefer domestic partnerships for financial reasons. California law treats domestic partners and married people the same for tax purposes. But federal law does not recognize domestic partners. That could let some couples avoid the federal "marriage penalty," which is a higher tax resulting from when two people marry who have the same income.

    Wiener's bill passed the state Senate 30-4 and the state Assembly by a vote of 60-0. It had no registered opposition from outside groups.

    When it took effect in 2000, California's domestic partnership law guaranteed domestic partners had hospital visitation rights and allowed health benefits to domestic partners of state workers. That same year, voters overwhelmingly approved Proposition 22, which said California would only recognize marriage between a man and a woman. That proposition was later invalidated by the California Supreme Court.

    Over the years, the state expanded its domestic partnership law several times, including in 2003 when the Legislature voted to make registered domestic partners have "the same rights, protections, and benefits" as married people.

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    Source: Hearst Television Inc. on behalf of KCRA-TV

    https://www.kcra.com/article/truckee-placer-county-bear-in-home-surveillance-camera-california/28754294
  • 14 Aug 2019 4:40 PM | Bill Brewer (Administrator)

    Image result for 2,600 Chipotle employees getting big bonus

    By Rachel Tesler

    Published August 13, 2019 | Retail | FOXBusiness

    Chipotle Mexican Grill announced Tuesday that over 2,600 employees from its 135 restaurants qualified to earn up to an extra week of pay through a new crew bonus program.

    All hourly restaurant employees who have been employed for the full quarter are eligible for the bonus, as long as the teams meet sales and cashflow requirements for the period. Chipotle calculates the bonus as an individual's average weekly pay per quarter, and employees can earn up to an extra month’s pay each year.

    The company also offers employees annual crew bonuses based on tenure and a minimum year of service. Chipotle crew members enjoy a number of benefits, including free English as a second language and GED classes for themselves and family members, 100 percent tuition reimbursement up to $5,250 per year, and standard medical benefits – and of course, free food.

    Chipotle spokesperson Erin Wolford told Fox Business, the company pays a national average of $12 an hour and likes to promote from within. According to Wolford, Chipotle employees received over $10 million in tuition assistance in 2018 alone.

    Please wait

    In a press release, the company said the full benefits and perks offered over the past year have contributed to lower turnover rates at the manager and crew level. It anticipates this change will increase the quality of the restaurant for customers, which was just named America’s favorite Mexican brand in a Market Force study.

    Ticker Security Last Change %Chg
    CMG CHIPOTLE MEXICAN GRILL INC. 796.57 -20.39 -2.50%

    "We are strategically investing in our people by giving all employees the opportunity to earn a performance bonus and it's paying off," said Marissa Andrada, chief people officer of Chipotle. "It's exciting to see how many locations qualified and the high level of engagement from our restaurant teams."


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    Source: FOX News Network

    https://www.foxbusiness.com/retail/chipotle-employees-crew-bonus


  • 14 Aug 2019 8:03 AM | Bill Brewer (Administrator)
    https://www.prnewswire.com/news-releases/us-employers-shifting-toward-variable-compensation-and-customized-benefits-to-hold-annual-salary-increases-below-3-percent-300893905.html

    U.S. Employers Shifting Toward Variable Compensation and Customized Benefits to Hold Annual Salary Increases Below 3 Percent

    Gallagher's 2019/2020 Salary Planning Survey Reveals Organizations Are Using Spot Bonuses, Performance-Based Compensation and Incentive Programs to Limit Structural Salary Increases, With Many Citing Higher Health Insurance Costs as a Primary Factor

    NEWS PROVIDED BY

    Arthur J. Gallagher & Co. 

    Aug 06, 2019, 09:00 ET

    ROLLING MEADOWS, Ill., Aug. 6, 2019 /PRNewswire/ -- While economists and policymakers often argue that sustained low unemployment incentivizes employers to raise salaries, many organizations are experimenting with new ways to prevent base salary costs from rising by more than 3 percent annually according to Gallagher's 2019/2020 Salary Planning Survey Report. Employers of all sizes and across all industries are using variable compensation models and customized benefit options to attract and retain workers for whom the highest possible pay may not necessarily be the top factor in deciding where to work.

    The 2019/2020 Salary Planning Survey Report found nearly four out of 10 (39 percent) organizations now use variable pay for at least one employee group. While the tight labor market is directly responsible for the rise in employee referral, hiring and retention bonuses, 20 percent of employers reported using lump sum awards for at least one employee group. And approximately one-third (32-35 percent) rely on variable pay for executive and manager-level employees, while nearly a quarter (22-25 percent) of employers also offer variable pay to lower-level employees, including those already qualifying for overtime pay under the Fair Labor Standards Act. The portion of compensation subject to performance rises from 5 percent for low-level workers to 25 percent for executives.

    Additionally, more than one out of four (26 percent) employers indicated higher healthcare costs were a primary factor for keeping salary increases in check. This aligns with Gallagher's 2019 Benefits Strategy & Benchmarking Survey, where nearly half (47 percent) of employers noted that controlling employee benefit costs was a top human resource priority. That said, employers that implement healthcare cost-sharing tactics, such as increasing employee premium contributions, must be conscious of the fact that employees and their families — just like their employers — suffer the financial pressure of higher healthcare expenses. As a result, lower salary increases coupled with higher healthcare expenses can have a negative impact on employee retention.

    "Through our in-depth analysis of the data, as well as countless conversations with employers, decision makers appear reluctant to raise salaries across the board because this significantly increases operating costs both in the near and long-term," said William F. Ziebell, CEO of Gallagher Employee Benefits Consulting and Brokerage. "It's important to understand that pay increases are not the only solution for attracting and retaining employees – particularly Millennials. By leveraging tailor-made benefits and compensation strategies, organizations can create a deeper connection with their workforce and, at the same time, keep expenses in check. A few examples include flex-time or remote-working options, as well as health and wellness programs."

    ABOUT THE 2019/2020 SALARY PLANNING SURVEY REPORT 
    The 2019/2020 Salary Planning Survey Report from Gallagher helps employers make fully informed decisions about compensation and benefit plans and programs that attract and retain top talent without breaking the bank. During April and May 2019, the survey captured data from company leaders, human-resource and financial practitioners representing 943 organizations, with 53 percent of respondents working for for-profit organizations and 47 percent for non-profits. View the report here: ajg.com/US-SPS-2019

    ABOUT GALLAGHER
    Arthur J. Gallagher & Co. (NYSE: AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 35 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

    Contact:          
    Mary Schwartz, Gallagher
    847.378.5893
    mary_schwartz@ajg.com

    SOURCE Arthur J. Gallagher & Co.

    https://www.prnewswire.com/news-releases/us-employers-shifting-toward-variable-compensation-and-customized-benefits-to-hold-annual-salary-increases-below-3-percent-300893905.html

  • 14 Aug 2019 7:54 AM | Bill Brewer (Administrator)

    BY MARIANNE WILSON

    August 8, 2019

    Nordstrom has achieved 100% pay equity.

    The department store retailer announced it has achieved 100% pay equity for employees of all genders and races,  providing equal pay for comparable work. Nordstrom said it evaluated pay equity by analyzing base pay to assess whether employees with similar roles, experience and performance earn equal pay for comparable work.

    “At Nordstrom, we are constantly working to create an environment where employees can build long-term and rewarding careers,” said Christine Deputy, chief human resources officer at Nordstrom. “As a part of this, we believe in paying employees fairly for the work they do, and we are committed to delivering on equal pay for comparable work.”

    Nordstrom is also committed to pay parity, which it described as a way to measure and report on gender representation at all levels of the company.

    “We’re at nearly 100% pay parity for men and women, which reflects our strong female representation across the company,” the retailer stated. “We will continue our efforts in this space to build our representation of women at all levels across the organization.”

    Nordstrom said it has always been focused on having strong gender representation, paying employees fairly for the work they do and making pay decisions that are free from bias. In the last few years, it has increased its  focus in this space, making significant investments to understand how it is doing at a more granular level.

    “Paying our people fairly, regardless of gender or race, enables us to deliver on our commitment to an inclusive environment where we can all be ourselves, contribute ideas and do our best work,” said Deputy. “This is an area that we will continue to invest in and be vigilant on because equality and diversity makes us all stronger.”

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    Source: Chain Store Age

    https://www.chainstoreage.com/finance-0/nordstrom-in-big-pay-milestone-and-is-near-another-one-as-well/
  • 12 Aug 2019 7:56 AM | Bill Brewer (Administrator)

    Performance management success factors: Align PM with organizational strategy

    by Tim McElgunn

    August 6, 2019

    Performance management processes and procedures have evolved at a blistering pace, perhaps faster than any other part of the Human Resources discipline.

    PM has transitioned from an industrial-age framework focused on maintaining consistent production schedules and quality to a flexible – and interconnected – tracking, coaching and talent development tool.

    Technology capabilities and limitations often drove process design in early PMS implementations.

    Organizations now require technology solutions that reflect their specific performance management framework and focus on the competencies that enable their unique strategy.

    Aligning performance management with organizational strategy

    To design an effective performance managemtn system, organizations need to understand how each job – and the career ladders or development paths for those jobs – feed into the organization’s strategic goals.

    That understanding provides the framework for how and how often performance assessment and guidance is conducted.

    It provides a way to assess performance not just in terms of “what have you done for me so far?” but also, “Where can we best use your talents and optimize your skills going forward?”

    Why is that so important?

    Effective and engaged employees share a couple of common characteristics, regardless of industry, job function, or seniority.

    They understand how their daily efforts make a difference in whether and how their organization achieves its strategic goals.

    Without that understanding, how can they to rate their own efforts and see where they should develop strengths and overcome limitations?

    An effective performance management solution provides the tools to answer that deceptively straightforward question for individual contributors, teams and organizations.

    And, like individual performance goals, a PM system design should flow from a clearly-defined strategy. Otherwise, those systems can limit, instead of advancing, that strategy.

    Asking the right questions

    Often, discussions about the need for performance management approach the topic at a tactical level.

    Indeed, many vendors’ websites suggest that customers look at tactical drivers when they are researching performance management tools.

    They suggest organizations ask themselves,” Why are we looking at investing in a new PMS?”

    • Compensation decision making?
    • Administrative support?
    • Developmental planning and guidance?
    • General performance measurement and reporting?

    For nearly every organization, the answer is, “Yes, all of that.”

    The good news is that there’s a growing ecosystem of performance management technology providers that support those core capabilities. And that’s fine as far as it goes.

    But that is also a problem. In the end, those are questions about the tool’s capabilities, not about the competencies required to implement your strategy.

    Strategy drives competencies, competencies drive PM

    Strategy is the expression of an organization’s mission, goals, objectives and interrelated action plans for achieving each of those targets.

    Those are the factors that determine what competencies you need to build, maintain and nurture.

    Mapping strategy components onto various functions — product development, production, marketing, sales, management and administration and partnerships — helps define and prioritize the tasks that you ask each of your people to perform.

    Answering strategic performance management questions requires the customer, and solution provider, to understand how each job – and any associated development plans and career ladders – feed into the organization’s strategic goals.

    An understanding of the competencies needed to support your strategic aims provides a framework for defining jobs, assessing performance and guiding employee development.

    Shared understanding of why, what and how

    If each of your processes flow directly from strategy, you can trace everyone’s work (actions and behaviors) from task to outcome.

    That allows everyone to see how their work combines with everyone else’s to enable the organization’s strategic ambitions.

    When everyone shares a strategy-based understanding of job responsibilities and interdependencies, they are empowered to hold themselves, and each other, accountable for outcomes.

    They can see where changes and improvements in their jobs might better support strategy. And they can anticipate and participate in realizing those changes.

    Feedback and adjustment

    So, if everything flows from strategy, is this a one-way, top down process?

    No. Like any successful living organism, companies, government agencies, charitable foundations or any other group enterprise operate in an infinite series of feedback loops and adjustment mechanisms.

    Designing a performance management structure and selecting the tools that can best support that structure needs to be a similarly interactive process.

    PMS design needs to include ways to capture and consider input from all stakeholders ranging from senior executive management through to line managers, employees and unions and, in many cases, indirect input from end customers.

    Are you optimizing people or processes?

    When companies were measuring how many acceptable widgets came off production Line B, and knew they’d be making those widgets for the foreseeable future, performance was easier to assess and to manage.

    Employees weren’t expected to change tasks on the fly, if at all. Training requirements were well-defined and could focus on a few specific skills.

    Today, however, you need every employee ready to quickly learn new skills and perform new tasks to support an evolving strategy.

    Managers need visibility into how workers’ capabilities fit with their current jobs and insight into any talents and interests that would be valuable elsewhere.

    Workers need to see how their skills fit with current tasks and what new skills they can and should develop to climb their chosen career ladder.

    That means both managers and workers need a holistic view of current and future competency requirements.

    And there is a real payoff: the more of a role your employees play in recommending and selecting skills they want to develop, the more excited they will be to use those skills.

    Performance management is everyone’s responsibility

    Of course, these highly complex and interdependent performance management tools and processes are only valuable if used consistently across your organization.

    Here again, tying the performance management process back to strategy makes it clear to all stakeholders just how critical it is.

    Leadership support for and continued attention to employee development sets the tone, but ease of use plays a huge part in how effective PM processes and technology solutions are for the organization.

    Employees and managers need to be able to learn and use PM systems without a massive time investment that takes away from productivity.

    That means organizations need to make learning and using performance management processes and tools part of every job description.

    And organizations should push PMS providers to continually improve both user interfaces and user training so those meet your specific needs.

    Measuring performance management ROI

    Performance management systems provide powerful tools for developing and nurturing competencies, making them among the most important investments an organization must make.

    Ultimately, performance management that maximizes workforce development and flexibility in line with a strategic framework is what differentiates successful and less successful organizations – even in the most highly-automated industries.

    The return on your performance management investment can be measured in financial terms reflecting increased efficiency, reduced turnover and other metrics.

    But the true measure of a successful PMS implementation is a flexible, teachable workforce that understands and supports your strategy and that has the resources they need to succeed and grow with your business.

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    Source: HRMorning

    https://www.hrmorning.com/articles/linking-performance-management-strategy/
  • 07 Aug 2019 2:47 PM | Bill Brewer (Administrator)

    AUTHOR

    Riia O'Donnell@RiiaOD

    PUBLISHED

    Aug. 5, 2019


    Dive Brief:

    • Sixty-seven percent of more than 2,000 participants in a recent Monster survey said they were unable to negotiate for their current salary. Data emailed to HR Dive by Monster, which was compiled in July, revealed how candidates negotiate salary in addition to vacation time. 
    • For pay negotiations, 41.5% of 1,982 respondents said that their company told them what they would make. Only 4.4% of those polled reported they were offered a pay rate higher than what they'd asked for, and 14.6% of candidates provided a salary range and the employer offered them a salary within that range, Monster said. For 15.3%, the final salary offer was less than what they requested.
    • When negotiating for vacation time, 22% of 1,667 respondents were able to negotiate their vacation time and agreed with the statement: "The vacation policy is why I work here." Some respondents (32%) tried to negotiate for more time, but were unsuccessful, while 21.3% said they were "just happy to get hired," Monster said. 

    Dive Insight:

    Although some reports have suggested salary negotiations are the new norm for most job seekers, those who don't partake cost themselves money in the short-term as well as into the future. The subject of salary is coming up earlier in the hiring process, as workers may be becoming more aware of their value in a tight talent market. Many believe that for some job seekers, like black candidates, not negotiating could contribute to wage gaps.

    On the whole, pay equity across genders and other demographic groups is top of mind for many employers, as they struggle to adjust policies and audit past practices in an effort to achieve parity. A move toward salary transparencycan be helpful, but there are limits to what businesses should make public, experts have said. 

    "You can be transparent about the company's overall compensation philosophy, how it sets compensation, and how it evaluates performance, salary increases, and bonuses without actually handing out a spreadsheet indicating how much each person earns," Felicia Davis, a partner at Paul Hastings, previously told HR Dive. 

    Many suggest competitive salaries now include more benefits, too. Unlimited paid time off is one perk employers have used to sweeten the pot, but one survey showed that around a third of employees don't even utilize the time they earn with traditional PTO policies. 

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    Source:  HR Dive

    https://www.hrdive.com/news/monster-67-of-candidates-did-not-negotiate-their-salaries/559671/
  • 25 Jul 2019 7:51 AM | Bill Brewer (Administrator)


    Despite a growing demand for the practice, sharing pay information can invite drama for employers ⁠— from workplace culture issues to legal actions.

    AUTHOR

    Jennifer Carsen

    PUBLISHED

    July 24, 2019


    Pay transparency has been dominating the headlines lately — but the concept tends to raise more questions than answers.

    Should you start distributing spreadsheets that include employee names and salaries? Are there any legal requirements to consider? What should you do if you discover inequities in your compensation practices? And how do you appease chatty or web-savvy employees who complain they're being paid less than they deserve?

    Two types of pay transparency

    Pay transparency can have two different meanings, according to attorney Liz Washko, a shareholder at Ogletree, Deakins, Nash, Smoak & Stewart, who spoke to HR Dive via email.

    "First, pay transparency can refer to permitting employees to discuss their pay with other employees without repercussions," Washko said. "From a legal standpoint, employers cannot prohibit this for any employees covered by the [National Labor Relations Act]." Some recent state laws forbid employers from enforcing such rules as well, Washko said.

    Attorney Marissa Mastroianni, an associate at Cole Schotz, similarly cautioned employers about Section 7 of the NLRA: "Employers can't have a policy (written or unspoken) saying that employees can't speak about compensation with each other."

    Second, pay transparency can refer to "one or more systems whereby the employer provides or publishes information regarding its applicable pay ranges for a position or even the specific pay for an employee or position," Washko said. While a limited number of states, including California, require employers to provide the pay range for a position upon the reasonable request of an applicant, in most places this is not legally required, she said.

    How much should you share?

    "Many external factors are putting pressure on employers to be more transparent about compensation," said Felicia Davis, a partner at Paul Hastings. "Employees are asking more questions, shareholder groups are asking employers to be more transparent, and foreign countries are asking for more information to be reported. There is also an EEO-1 component."

    That said, added Davis, there are different ways to be transparent. "You can be transparent about the company's overall compensation philosophy, how it sets compensation, and how it evaluates performance, salary increases, and bonuses without actually handing out a spreadsheet indicating how much each person earns," she said.

    Very few companies, Davis said, are completely transparent with respect to individual compensation decisions. "So many factors go into what an individual is compensated, and I have never met an employee who doesn't think they're a top performer," she said. "Disclosing this data can lead to hurt feelings and is not productive."

    Mastroianni said that total openness about pay can foster a competitive workplace environment, one in which many workers "don't thrive," she said. She added that a company paying at or below market rates may find it difficult to hire and retain talent.

    Complete transparency about pay can also expose a company to legal risks. Even in the absence of a pay equity law, said Mastroianni, it's still a discriminatory practice to pay employees differently on the basis of protected characteristics. And employees are likely to interpret the data subjectively. The lowest earner in a job description may wonder, for example, if he or she is illegally being paid less because of a protected characteristic, like a disability, Mastroianni said.

    Davis pointed out that many compensation audits are conducted at the direction of counsel. In this situation, the more information about pay that is widely shared, "the more you might risk waiving privilege," she said.

    Pros to pay transparency

    Employees appreciate when employers are transparent about compensation philosophies and practices, said Davis; "It helps people feel they are being compensated fairly and helps engender goodwill." It can also motivate employees to work harder, said Mastroianni, if they know they are in the middle of the pay scale and want to move up.

    Washko said providing applicants with information about pay ranges can keep both employers and applicants "from wasting time on a hiring process that was not likely to be successful." On the other hand, if a business pays at or above market rates, said Mastroianni, this can be a plus — applicants may be able to envision their possible earnings trajectory at your company over the long term.

    Pay transparency may have broader societal implications as well. "Transparency is the only path that leads to income equality," said Steven Power, global president at Deputy, who spoke to HR Dive via email. "It should be a company's obligation to demonstrate their approach to the remuneration and benefits process in a consistent manner for the same positions across the organization. This will lead to equal opportunities — approached congruently by businesses — as well as an amazing morale boost."

    Management can be "blissfully ignorant" about pay disparities sometimes, said Mastroianni. Publishing and analyzing compensation information "can bring pay equity issues to the forefront" and help remedy gaps.

    What to do about disparities?

    "The first thing an employer should do when it discovers a pay disparity is to determine whether the individuals subject to the pay disparity are performing equal or substantially similar work," said Washko. "The reference to 'equal' work is applicable under the federal Equal Pay Act; the reference to 'substantially similar' work is applicable under some state pay equity laws that have recently been passed." 

    If the work is equal or substantially similar, she said, the employer should determine if there is a legitimate justification for the pay disparity — such as meaningful differences in education, experience, training, or performance.

    If there is no such justification, a remedy could "include an adjustment in pay to the person or persons determined to be underpaid," said Washko. "But it should also include an assessment of how the disparity came about and whether there are opportunities to improve one or more policies or procedures to prevent these issues from arising in the future." This process could involve a legally privileged pay equity analysis, she added. 

    How to handle individual employee complaints?

    There is potential for drama when it comes to pay transparency, said Mastroianni, which might require "company leadership to sit down with management and say, 'people will have questions.' The company should be able to explain those numbers — not only what they are, but how they were obtained."

    Additionally, Mastroianni said, employers must be prepared to "have a discussion with a disgruntled employee; you must give this employee a solution." Employers could explain, for example, why employees are paid the amount they're paid and lay out a roadmap for improved performance and pay going forward, she said.

    Individual concerns may be handled on an individual level, said Washko. Employers may need to adopt a broader strategy if the complaints spread: "If a larger group of employees raises concerns, the employer may need to consider a broader message to help employees understand the types of information the employer considers in making pay decisions — to illustrate that the employer takes the matter of compensation seriously and makes decisions based on fair and appropriate reasons." 

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    Source: HR Dive

    https://www.hrdive.com/news/pay-transparency-how-much-should-you-share-with-employees/555923/
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