PUBLISHED MAY 16, 2023

Job seekers’ relocating for new jobs fell to the lowest level on record in the first quarter of 2023, as employers continue to offer remote and hybrid positions and job seekers become unwilling to move for work. Meanwhile, rising interest rates mean buying homes becomes a less attractive option as well, according to data released Monday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

The data comes from a survey of over 3,000 job seekers across the country the firm conducts quarterly.

Relocation For New Jobs Grinds to a Halt

In the first quarter, 1.6% of job seekers relocated for new positions, according to the survey, down from 3.7% in the final quarter of 2022 and 4.6% in the same quarter last year. It is much lower than the 7.5% of job seekers who moved for positions in the second quarter of 2020, the highest since Q4 2018, when 7.7% of job seekers relocated.

 

Source: Challenger, Gray & Christmas, Inc. ©

 

“In the 1980’s and 90’s, nearly a third of job seekers would move for new positions. That has fallen steadily since, as housing costs have risen and companies have moved to where talent pools are located. Now, remote and hybrid positions are keeping workers at home,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

 

Source: Challenger, Gray & Christmas, Inc. ©

 

The reluctance to move is possibly the result of job seeker demand for remote work options, though companies appear to be offering them less often. According to a new Challenger survey conducted online in April and May among 170 companies nationwide, 39% of companies are offering fully remote work options, down from 44% of companies who offered them last fall, and 61% who offered them Spring 2022. Fully remote work offerings peaked in Fall 2022, when 73% of companies offered them to their workers and hires, according to Challenger.

“Many employers are recalling workers to the office, at least for part of the time. Hybrid work is becoming much more common, and job seekers who are holding out for fully remote may have to concede some time to the office,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

In fact, 32% of companies report most of their workers are in the office, though they’re allowing remote work on a case-by-case basis. That is up from 13% who reported this last fall. Of those companies with hybrid options, most workers are in the office two days a week with 29%, while 26% are in 3 days a week. Another 13% are in the office 4 days a week.

“Another reason job seekers have refused to move for work is the cost. With interest rates continuing to rise, mortgage rate increases and persistent inflation, the cost of selling a house and finding other housing may not be worth it to job seekers,” said Challenger.

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Source: Challenger, Gray & Christmas

https://www.challengergray.com/blog/q1-2023-job-seeker-relocation-falls-to-lowest-on-record-as-remote-hybrid-work-persists/

ARLINGTON, VA, March 6, 2023 — Demand for international pensions and savings vehicles is continuing to grow as employers try to optimize their benefits packages for different groups within their global workforce, research by WTW showed today.

WTW (NASDAQ:WTW), a leading global advisory, broking, and solutions company, launched its latest International Pension Plan Survey, which covered 1023 International Pension and Savings Plans (IPPs and ISPs). A quarter (23%) of these were set up in the last five years, reflecting the growth in demand. Assets under management of the surveyed IPPs and ISPs reached US$19.3bn, up 5% from the previous year.

Around half (51%) of the IPPs and ISPs were set up for expatriate workers unable to stay in their ‘home’ country plans, while at the same time either locked out of their ‘host’ country arrangements or likely not entitled to a benefit from any potential ‘host’ plan.

But IPPs and ISPs can also solve savings problems for various other employee groups. One in eight (13%) plans were established to include and serve local employees, often in countries at risk of economic or political instability.

“

Companies are facing skills shortages in many hotspots across the world and are redefining their employee experience and total benefits offer to stay competitive.”

Tony Broomhead | managing director, Integrated and Global Solutions, WTW

Tony Broomhead, managing director, Integrated and Global Solutions, WTW, said: “Companies are facing skills shortages in many hotspots across the world and are redefining their employee experience and total benefits offer to stay competitive. Many multinationals, charities, and international governmental organisations are looking for ways to offer minimum yet sufficient levels of pensions and savings to their global staff.

“Expats are often excluded from joining local ‘host’ pension schemes, or it may be inadvisable for them to do so. And local staff in many countries may also have limited options, or any savings may face the risk of economic instability or local sovereign debt default. International plans are a flexible way for employers to offer these vital benefits in a secure and efficient way.

“Companies are looking at setting up IPP or ISP solutions that can meet and fix multiple pensions challenges within the business. These plans can serve various expat groups, such as foreign staff excluded from local plans like the Central Provident Fund in Singapore, or to reward executives subject to capped ‘home’ country benefits. In the Middle East and GCC these international plans can be used to fund mandatory gratuities.

“More recently these plans can help meet DEI objectives whereby plan sponsors are keen to be able to report that by including an IPP they are now able to offer access to a pension plan to all their global staff.”

The WTW IPP Survey 2023 also found that:

• Of the 1 in 8 plans offered to local employees in countries facing more challenging political and economic circumstances, Egypt was the most popular location for such IPPs/ISPs. 32 plans included Egypt-based savers. Argentina-based employees were in 31 plans, Lebanon 28, Sri Lanka 16, and Ecuador 15.
• ESG considerations are an emerging focus for IPPs and ISPs, with 163 plans indicating that they reviewed the fund range in the past 12 months for ESG considerations, which includes Diversity, Equity and Inclusion audits.
• 71% of plans were established with a 'retirement objective' (IPPs), and 29% have a shorter-term 'savings objective' (ISPs).
• Almost all (94%) IPPs are defined contribution, with employer contribution rates typically ranging from 10% to 14%.
• IPPs/ISPs are offered by companies in all business sectors, but particularly in banking and finance, which accounted for 26% of plan sponsors, followed by oil and gas (9%), and consumer goods and retail (7%).

About the Survey

The WTW International Pension Plan Survey 2023 was conducted in Q4 2022 and covers 1023 IPPs and ISPs sponsored by 955 companies. It is the 15th edition of the survey. Download a free copy here.

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Source: WTW

https://www.wtwco.com/en-US/news/2023/03/global-employers-look-to-creative-cross-border-pensions-to-help-expats-and-local-workers-in-unstable

Feb. 22, 2023, 7:19 AM

Khorri Atkinson - Senior Labor & Employment Reporter

Chris Marr - Staff Correspondent 

A former offshore oil rig worker earning more than $200,000 a year is eligible for overtime pay under federal law, the US Supreme Court ruled.

The high court’s Wednesday ruling upheld a US Court of Appeals for the Fifth Circuit September 2021 decision that former Helix Energy Solutions Group Inc. worker Michael Hewitt wasn’t exempt from the Fair Labor Standards Act’s overtime requirement because the company paid him a day rate and not a guaranteed weekly salary.

The day-rate basis on which Hewitt was paid, “so that he receives a certain amount if he works one day in a week, twice as much for two days, three times as much for three, and so on” doesn’t count as a salary basis to exempt him from the FLSA’s overtime protections, Justice Elena Kagan wrote for the 6-3 majority.

The case has significant implications for the energy industry because of its use of day rates instead of salary rates to compensate workers, including highly paid employees on oil-field or offshore jobs.

The heart of the case comes down to the relationship between the FLSA’s implementing regulations governing overtime pay exemptions for highly compensated executives, administrative, and professional employees.

To be exempt, executives must be paid on a salary basis, meaning their predetermined pay must be “calculated on a weekly, or less frequent basis” and not tied to the hours worked per week. They also must have a minimum pay threshold of $684 per week.

The regulations also say workers paid on an hourly, daily, or shift basis can be classified as salaried, and thus overtime exempt, as long as their employer guarantees “at least the minimum weekly-required amount” despite the number of hours, days, or shifts worked.

Helix argued that, because Hewitt was an executive who received more than the minimum weekly pay and whose compensation never changed, the case should end there.

But Hewitt said Helix never offered him a minimum weekly guaranteed pay, so his day rate earnings can’t be classified as a salary.

Clement & Murphy PLLC represents Helix. Boies Schiller Flexner LLP represents Hewitt.

The case is Helix Energy Sols. Grp., Inc. v. Hewitt, U.S., No. 21-984, 2/22/23.

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Source: Bloomberg Law

https://news.bloomberglaw.com/daily-labor-report/supreme-court-holds-six-figure-worker-entitled-to-overtime-pay

Board Rules that Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights

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February 21, 2023

Today, the Board issued a decision in McLaren Macomb, returning to longstanding precedent holding that employers may not offer employees severance agreements that require employees to broadly waive their rights under the National Labor Relations Act. The decision involved severance agreements offered to furloughed employees that prohibited them from making statements that could disparage the employer and from disclosing the terms of the agreement itself.  

The decision reverses the previous Board’s decisions in Baylor University Medical Center and IGT d/b/a International Game Technology, issued in 2020,  which abandoned prior precedent in finding that offering similar severance agreements to employees was not unlawful, by itself.  

Today’s decision, in contrast, explains that simply offering employees a severance agreement that requires them to broadly give up their rights under Section 7 of the Act violates Section 8(a)(1) of the Act. The Board observed that the employer’s offer is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement.      

“It’s long been understood by the Board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights under the National Labor Relations Act.  Today’s decision upholds this important principle and restores longstanding precedent,” said Chairman Lauren McFerran.   

Members Wilcox and Prouty joined Chairman McFerran in issuing the decision. Member Kaplan dissented.

Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions. The NLRB conducts hundreds of workplace elections and investigates thousands of unfair labor practice charges each year.

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Source: National Labor Relations Board (NLRB)

https://www.nlrb.gov/news-outreach/news-story/board-rules-that-employers-may-not-offer-severance-agreements-requiring?utm_campaign=hrb&utm_medium=newsletter&utm_source=morning_brew

PUBLISHED TUE, FEB 21 20236:00 AM ESTUPDATED TUE, FEB 21 20236:59 AM EST

KEY POINTS

• Home Depot said it will spend an additional $1 billion to raise hourly employees’ wages.
• The home improvement retailer is the latest to signal that the labor market is still tight.
• Walmart, the nation’s largest private employer, recently announced it would raise its minimum wage to $14 an hour for store employees.

Home Depot on Tuesday said it will spend an additional $1 billion to give its hourly employees a raise, as retailers and restaurants compete for workers.

The home improvement retailer announced the wage investment as it reported fourth-quarter earnings. It did not disclose the new average wage for employees, but said every market’s starting wage is at least $15 an hour.

Hourly workers will see the increase, which went into effect on Feb. 6, this month in their paychecks. The increase will boost pay for all hourly workers in the U.S. and Canada.

With the move, Home Depot becomes the latest major retailer to signal that the labor market is still tight — especially when it comes to lower-wage hourly workers. Across the jobs market, the data is still strong: The unemployment rate fell to 3.5% in and nonfarm payroll growth was better than expected in December, the most recently available data from the U.S. Bureau of Labor Statistics.

Several big-name tech companies and banks, including Google, Amazon and Goldman Sachs, have laid off thousands of employees. So far, however, retailers, restaurants and the hospitality industry has largely bucked the trend — and even announced plans to hire or boost pay.

Walmart, the nation’s largest private employer, recently announced it would raise its minimum wage to $14 an hour for store employees and have an an average U.S. hourly wage of more than $17.50, as of early March. Chipotle Mexican Grill said it wants to hire 15,000 restaurant workers ahead of its busy spring season.

The companies have made those plans, despite industry-watchers’ expectations for slower sales growth in the year ahead. Companies have cited labor costs among the things driving up their budgets. But they also feel pressure to increase pay as prices rise for groceries, rent and other essentials.

Home Depot is one of the country’s largest private employers with about 475,000 workers. The vast majority of its employees are hourly workers at its approximately 2,300 stores in the U.S., Canada and Mexico. Its frontline employees, who will receive the wage increases, also work in supply chain, customer care and merchandising roles.

In an email to employees that was shared with CNBC, Home Depot CEO Ted Decker said the investment “positions us more favorably in every market where we operate.” He said higher wages will improve the customer experience as the company attracts more high-quality workers and keep experienced staff.

“This investment will help us attract and retain the best talent into our pipeline,” he said.

Home Depot has added more training opportunities, too, he said, including the promotion of more than 65,000 employees in 2022 alone.

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Source: CNBC

https://www.cnbc.com/2023/02/21/home-depot-hourly-workers-raise.html

A new Vestwell research report details emerging retirement trends for employers and workers.

Reported by NOAH ZUSS

Employers failing to offer workers a retirement benefit have dismissed a basic feature demanded by employees, Vestwell research finds.

As a result of the COVID-19 pandemic, workers’ expectations for their workplace benefits are higher and dissatisfaction has contributed to the post-pandemic Great Resignation and a historically low U.S. unemployment rate of 3.5% in December. Many expect employers to offer a retirement plan benefit, according to the Vestwell 2023 Retirement Trends Report.

“Regulatory tailwinds and advanced technologies have enabled a monumental shift in the industry, expanding retirement access to small businesses and savers that are historically difficult to reach,” Aaron Schumm, founder and CEO of Vestwell, said in a press release.

The research found 73% of employees said they agreed or strongly agreed that they expect employers to offer a 401(k) or 403(b) retirement plan because of the tight labor market and 98% of respondents said they think it’s important for their employer to offer a retirement benefit for employees at the workplace.

Voya Financial Research shows a retirement plan is as important for employee retention as a competitive salary and work arrangement, according to November data 2022, that finds 60% of workers are more likely to stay with their current employer if they offer an employer-sponsored retirement plan.

Among registered voters 25 and older, 96% said that having a workplace retirement savings plan is important to helping them save for retirement, and 92% supported establishing a program to help workers save for retirement if their employer does not currently provide a retirement plan at work, according to American Association of Retired persons 2021 data, presented in a blog post.

The SECURE 2.0 Act of 2022, a package of legislative retirement reforms passed by Congress in December 2022, included provisions to expand retirement plan benefit coverage. The legislation “significantly sweetens the deal for small businesses” interested in offering a retirement plan for the first time, according to the report.

The favorability for employer-sponsored retirement plans at work was shown by workers’ reported saving preference, ranked as follows:

• 401(k) (57%)
• cash balance plan (23%)
• individual retirement account (11%)
• emergency savings account first (4%)
• health savings accounts at the top (3%)
• 529 college savings plans (2%).

“A super-majority of [the] responding population indicated that they see retirement benefits as an expectation, rather than an exceptional perk,” the report found. “Employers seeking to differentiate their benefits package may consider offering additional savings benefits beyond just a retirement plan.”

Vestwell found 89.6% of employees expect companies that offer a retirement plan to also be involved in retirement education. To meet this demand, employers want to work with retirement plan advisers: 30% of plan sponsor respondents placed employee education as the top preferred service among expanded services for employers.

The “survey [data] shows an opportunity for small businesses, technology providers, and advisers to come together and embrace the new savings paradigm of 2023: where retirement plans are an expectation, employers are expanding their benefits, and employees have confidence in their position in the market,” the report concluded.

Data for the Vestwell report was gathered in a series of surveys, conducted in 2022, that included more than 1,300 employees, 500 advisers and 250 small business owners.

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Source: PLANSPONSOR

https://www.plansponsor.com/plans-use-digital-nudges-to-move-plan-participants-toward-retirement-goals/

California and Washington have both enacted pay transparency laws this year

BY ERIN BENDIG | PUBLISHED 30 JANUARY 2023

Earlier this month, pay transparency laws went into effect in Washington and California, requiring employers to list pay ranges on job listings. Later this year, New York state will also follow suit. These laws, already in place in Colorado, are one way that states are combatting wage gaps —including racial and gender pay gaps. In fact, the gender pay gap was cut by 45% in organizations that disclosed pay compared to those that didn’t. As more states, including South Carolina and Massachusetts, begin developing pay transparency laws, this could soon become the new norm. 

Here’s what you need to know about the new pay transparency laws effective this year.

California: At the beginning of this year, California’s labor code(opens in new tab) began requiring employers with more than 15 employees to list salary ranges on job postings, even for postings on third-party websites. 

Employers are also required to share pay ranges for an employee's current position, upon request — which is likely to put the cat among the pigeons... Home to many powerful companies — like Apple and Wells Fargo — and to millions of employees, California's pay transparency laws could soon become the new normal across states. 

Washington: Similar to California, Washington now requires employers with more than 15 workers to share salary information on job postings — both internally and on third-party sites like Glassdoor and LinkedIn — thanks to the Equal Pay and Opportunities Act(opens in new tab). Furthermore, company benefits, like health care, retirement benefits and sick leave, are also required on job listings. These requirements are effective whether the applicant will fill a position in person or remotely.  

Rhode Island: Rhode Island has also required further pay transparency from employers. According to Rhode Island’s Pay Equity Act(opens in new tab), if requested, employers are required to provide pay ranges for job listings if "inquired about". However, they don't have to list these ranges outright on job listings. Employers will also be required to disclose salary ranges before an employee is hired or before they change positions. 

New York State: New York state’s transparency laws will go into effect in September of this year. Starting in September, New York employers are required to share pay ranges for job listings. This applies to employers with four or more workers. Pay transparency laws have been in effect in New York City since November 1, 2022, which made it the largest municipality in the U.S. to codify pay transparency.

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Source: Kiplinger

https://www.kiplinger.com/personal-finance/more-states-roll-out-pay-transparency-laws

January 27, 2023

On November 28, 2022, the Securities and Exchange Commission (the SEC) published final clawback rules (the Final Rules) in response to the long-standing requirement under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act to increase transparency and disclosure in financial reporting; the Final Rules were adopted by the SEC on October 26, 2022, and become effective 60 days following publication, i.e., January 27, 2023.

Ultimately, the Final Rules will require companies that are listed on the NYSE or NASDAQ to establish, comply with, and disclose a written policy that provides for the recovery, or clawback, by the company of any incentive-based executive compensation that is received by current and former executive officers during the three-year period preceding any requirement to prepare an accounting restatement based on a misstated financial performance measure. Smaller reporting companies, emerging growth companies, foreign private issuers, and controlled companies will not be exempt from compliance with the Final Rules.

In the near term, new Rule 10D-1 of the Securities Exchange Act of 1934, as amended (the Exchange Act), instructs the NYSE and NASDAQ to revise their listing standards to require listed public companies to establish, adopt, and abide by a written clawback policy mandating the recovery of any excess incentive-based compensation (i.e., compensation that is based upon attaining a specific financial reporting measure) that is received by current or former executive officers in the event that the company needs to prepare an accounting restatement due to material noncompliance with a financial reporting requirement under applicable securities law. Affected companies will be required to file their clawback policies with, and provide certain disclosures in, their annual reports and certain other public filings.

The Final Rules require each exchange to file its proposed revised listing standards within 90 days of the publication date of the rules, i.e., February 26, 2023, and the proposed revised listing standards must be effective by the first anniversary of the publication date, i.e., November 28, 2023. This means that, on the date that the listing standards become effective (which may be before November 28, 2023), all incentive-based compensation received by executive officers on or after such date must be subject to a compliant clawback policy, and all disclosures required by the Final Rules must be included in all applicable SEC filings required on or after that date. The latest date for companies to adopt a compliant clawback policy is 60 days after the revised listing standards become effective, which, at the latest, could be January 27, 2024, assuming that the applicable exchange’s revised listing standards do not have an earlier effective date. Companies should monitor developments regarding the revision of existing listing standards, as the dates noted are the latest possible dates.

The Final Rules are significantly more expansive than the prior rules adopted under the Sarbanes-Oxley Act of 2002, which require the recoupment of erroneously paid compensation to the CEO and CFO for material restatements resulting from misconduct. Under the Final Rules, clawbacks will be required for more types of restatements, including restatements that are not material (what the SEC calls “little r” restatements), in addition to those restatements that correct errors that are material to previously issued financial statements, i.e., “big R” restatements. Little r restatements correct errors that are not material to previously issued financial statements but would result in a material misstatement if (i) the errors were left uncorrected in the current report or (ii) the error correction was recognized in the current period. A finding of fault will not be necessary in order to trigger the obligation to recover compensation, and companies will be prohibited from indemnifying affected executive officers against the loss of erroneously awarded compensation. Further, the new rules will apply to more executives, i.e., all Section 16 officers, than are covered under most existing policies.

For purposes of the Final Rules, the definition of “executive officer” is the same as that found in Rule 16a-1(f) of the Exchange Act and includes a company’s president; principal financial officer; principal accounting officer (or, if none, the controller); any vice president of the company in charge of a principal business unit, division or function; and any officer who performs a policy-making function.

The company’s recovery shall be limited to any excess amount “received” during the three completed fiscal years prior to the date when the company became required to prepare the accounting restatement. Under the Final Rules, the term “received” is intended to mean that the applicable financial reporting measure connected to the incentive compensation has been satisfied and the incentive compensation has been earned, even if not yet paid, such that a bonus award would be deemed received in the fiscal year it was earned on the achievement of the performance measure, even if it was not actually paid until the following year. The clawback amount (on a pre-tax basis) is the difference between the incentive-based compensation received by the executives and the amount that would have been received based on the required restatement.

There are limited exceptions to the recovery requirement due to impracticability where the company has already made a reasonable attempt to recover the excess compensation and (i) direct third-party expenses incurred to assist in enforcing the policy would exceed the amount to be recovered, (ii) the company receives an opinion of home country counsel advising that the recovery would violate home country laws that predated the new rule, or (iii) the recovery would likely cause a tax-qualified retirement plan to fail to meet IRS requirements.

New disclosure requirements related to the Final Rules were also adopted in amendments to Item 601(b), Item 402, and Item 404(a) of Regulation S-K as well as to the cover pages of Forms 10-K, 40-F, 20-F, and, for listed funds, Form N-CSR, which require reporting the adoption and compliance with the clawback policy in annual reports, proxy statements, and information statements. These disclosures will need to be tagged using Inline XBRL. Under new Item 601(b)(97) of Regulation S-K, affected companies will need to file a copy of their clawback policy as an exhibit to their Annual Report on Form 10-K. Under new Item 402(w) of Regulation S-K, to the extent that an accounting restatement becomes necessary, a company will need to disclose the date when it became required to issue an accounting restatement, the amount of excess compensation that was awarded, an explanation of how the excess amount was calculated, how much of the excess amount had not been recovered as of the end of the last completed fiscal year, and an explanation as to any impracticality that precludes its recovery.

A company will be subject to delisting if it does not establish and comply with a clawback policy that meets the requirements of its exchange’s listing standards. As such, companies listed on the NYSE or the NASDAQ are strongly encouraged to begin the process of preparing and implementing a clawback policy for incentive-based executive compensation, determine whether they need to amend any of their current policies in order to comply with the Final Rule’s requirements, confirm which executive officers will be subject to the policy (including both current and former officers), and consider how the Final Rules may affect their existing compensation plans or accounting practices and what measures could reasonably be taken to recover any such compensation. While companies will not be required to adopt a clawback policy, or amend an existing one, to comply with the new rules until after the exchanges publish final revised listing standards implementing Rule 10D-1 and such standards become effective, companies can and should begin the process of evaluating their current circumstances and planning accordingly.

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Source: JD Supra

https://www.jdsupra.com/legalnews/sec-adopts-new-executive-compensation-5450402/

January 17, 2023 — Scottsdale, Arizona— WorldatWork’s Pay Equity Study finds an increase in organizations acting on pay equity.

The survey revealed 70% of organizations are taking action on pay equity in 2022, a 10% increase since 2019 and a 4% increase over 2021. Only 2% of organizations reported not having pay equity on their radar. Three-quarters of organizations reported that they have been doing pay equity analysis for three years or more compared to two-thirds in 2021.

Organizations taking action on pay equity cite “it’s the right thing to do, to build/maintain a culture of trust and to remove bias against protected classes” as the main reason for doing so. The potential cost to fix pay inequities is cited as one of the largest barriers for companies that have pay equity on their radar and have not yet acted.

“Increasingly employees want more transparency on how they are being paid and why,” said Sue Holloway, CCP, CECP, compensation content director at WorldatWork. “With more pay transparency legislation being implemented, pay equity has garnered more attention from organizations.”

Organizations are increasingly concerned about the legal risk of pay inequity; since 2020 the proportion citing “mitigating legal risk” as very or extremely influential to their organization’s choice to pursue pay equity has increased by 20% to 71%.

While organizations have begun to include more types of compensation in their pay equity analyses, most organizations could improve their pay equity analysis by being more inclusive of all types of pay.

Among organizations that have a pay equity process in place:

• Nearly all include base pay in their analysis or are thinking of including it in 2023.
• More than half include or hope to soon include short-term incentive plan payments (e.g., annual bonuses, profit sharing), and sales commissions/incentive payment.
• Nearly half include or anticipate including long-term incentive plan equity/stock-based grants.
• Even the least-frequently included types of compensation, such as special one-time equity/stock-based grants are (or likely will soon be) included in pay equity analysis by more than a quarter of respondents.

“If companies conduct an analysis only on base pay, they could be leaving out important elements of total compensation. Including bonus payouts, equity grants, and other kinds of compensation results in a more holistic analysis.” – Emily Cervino, Head of Fidelity Stock Plan Services Industry Relationships and Thought Leadership

When it comes to communicating about pay equity:

• Just over one in ten share the high-level results of pay equity analysis publicly.
• Only a quarter share the high-level results with their employees.
• And only a third even share the fact that they are doing a pay equity analysis with their employees.

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Source: HRO Today

https://www.hrotoday.com/ticker/worldatwork-survey-finds-70-of-organizations-are-taking-action-on-pay-equity/

Payroll errors can cost businesses up to $705 per error

OKLAHOMA CITY--(BUSINESS WIRE)--One in five payrolls in the United States contains errors, each costing an average of $291, according to a new Ernst & Young survey. The study also shows the negative impact of traditional payroll methods where perfect payrolls often do not occur.

The average organization makes 15 corrections per payroll period, according to EY. The effects are costly: lost revenue, hours correcting errors, and potential lawsuits and fines.

“Payroll errors have consequences for employees, businesses and the broader economy,” said Chad Richison, founder, chairman and CEO of Paycom. “Organizations need to ensure their payrolls are 100% accurate and not hindering their businesses or people. With Beti, Paycom’s self-service payroll solution, employees are empowered to identify and correct errors ahead of time so everybody wins. Beti is the future of payroll.”

More than 40% of surveyed organizations facing litigation as a result of payroll errors resort to cutting jobs. More than half of those facing regulatory and compliance issues as a result of payroll errors also resort to cutting jobs. Others facing regulatory and compliance issues reported declines in employee morale (41%), fines (15%) and reputational decline (36%).

EY targeted companies with 250 to 10,000 employees and collected responses from 508 individuals who work at companies headquartered in the U.S. and work with payroll.

Survey results indicate an average 1,000-employee organization spends an aggregate of 29 workweeks fixing the most common payroll errors.

Time/attendance and expense errors were the most common payroll errors, occurring on average more than once per employee per year. Those errors cost about $250,000 per 1,000 employees, according to EY. Errors recorded include:

Payroll error category	Errors per 1,000 employees, per year	Cost per 1,000 employees, per year
Time/attendance and expense	1,139	$250,000
Vacation/PTO/sick time requests	721	$220,000
Benefits	503	$140,000
Schedule earnings and deductions	410	$135,000
W4 and tax allocation changes	229	$135,000
Direct deposit	159	$45,000

The top five most time-consuming errors to fix — time punches, expenses, uniforms charge errors, sick time not being entered and errors setting up health savings plans — take nearly 29 40-hour weeks to fix per 1,000 employees. That’s more than half a work year spent on manual processes instead of strategy to advance a business. Fixing missing and incorrect time punches was the most time consuming; companies spent 26 minutes per employee fixing these errors in the last fiscal year.

The EY report comes on the heels of a Morning Consult survey commissioned by Paycom showing payroll errors cause nearly 1 in 5 American adults to take drastic actions and nearly 60% would have difficulty paying bills and making purchases if just $100 were missing from their check. The good news: Outdated payroll and related problems are easily fixable. For example, Paycom’s Beti guides employees to find and fix payroll errors before submission.

More information on the EY report can be found here.

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Source: Business Wire

https://www.businesswire.com/news/home/20221222005093/en/EY-survey-Payroll-errors-average-291-each-impacting-the-economy