Looking for a pay bump? The outlook is bumpy

Diane Stafford

Good luck trying to predict if your total compensation will improve this year. Most hourly workers — and many salaried ones — are facing a confusing future.

On the one hand, the federal government is working on a rewrite of regulations governing who is due time-and-a-half pay when working more than 40 hours a week. The proposed revisions, as published last month, are designed to give more workers overtime rights.

On the other hand, many employer and business organizations said they’re more likely to reduce workers’ hours and use more part-timers than to pay overtime rates to full-time employees.

On the one hand, the federal government has implemented health care industry reforms that require employers of a certain size to offer health insurance policies to employees who work at least 30 hours a week on average.

On the other hand, some of those employers are scheduling employees to work fewer than 30 hours a week to avoid the insurance coverage mandate.

On the one hand, many employers have voluntarily raised their minimum wage and a growing number of cities and states around the country are raising their required wage floors above the 6-year old federal minimum of $7.25 an hour.

On the other hand, many employer and business groups say they’ll cut jobs or hours if they are forced to pay a higher minimum wage.

There’s also the push-pull of market forces. Employers say it’s gotten harder to find and keep good people, which typically causes pay to improve as employers compete for the best workers.

But pay for most workers has stayed stagnant while business profits and top executive pay have risen, and organizations are channeling investments into capital improvements instead of staff.

Other compensation trends cloud pay forecasts further. Many organizations don’t give annual, cost-of-living or across-the-board raises. The trend is for harder-to-predict raises based on performance or promotions.

Also, the ranks of part-time and self-employed workers have swelled. Some self-employed people earn more than they made on an employer’s payroll; others struggle.

Both the self-employed and part-timers miss out on the value of employer-paid employee benefits, such as paid vacations, sick leave and subsidized insurance. In some organizations, the benefits package accounts for nearly one-third of payroll costs.

In short, there is no groundswell movement to raise employee pay or benefits.

Many employers waited to see what Congress and the U.S. Supreme Court would do about the Affordable Care Act before acting on employee compensation. Others are holding their breath to see if the Federal Reserve Board will raise interest rates later this year. Some still are reorganizing downsized workforces.

Will you take home more money this year?


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