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3 Steps to Employee Compensation Compliance

Equal pay for equal work: It’s the principal at the core of pay legislation in the United States, and one that should be at the core of your organization’s compensation policy. But how can you ensure that you’re in compliance?

1. Know the Laws

Decisions about employee compensation are governed in part by the Equal Pay Act, which aims to stop gender discrimination. This act measures four compensable factors, enforced by The Equal Opportunity Commission, that determine the nature of a job:

  • Skill
  • Effort
  • Responsibility
  • Working conditions

In addition to the Equal Pay Act, employers need to comply with The Lilly Ledbetter Fair Pay Act, (2009) which extended a statute of limitations for compensation complaints. This act goes beyond the Equal Pay Act by adding protected classes, such as race and national origin.

Three Ways Managers Can Prepare HR for an Audit

News of an impending audit can cause trepidation in a HR department. HR professionals might wonder: “Will this audit point out my short-comings? Will it mean more work for us?”

The reality is that a HR audit can be a collaborative process that can help the department operate more efficiently and strategically, and can enhance communication and trust throughout an entire organization.

So how can management help the human resources department see the benefits of an impending audit? Here are three key steps:

The Connection Between Job Analysis and Market Pricing

Market pricing can help organizations arrive at an externally competitive wage that will help them recruit, retain, and motivate their workforce; but equally important is developing an accurate sense of a job’s internal worth and value to the company. This becomes even more critical as the size of the organization increases and employers have to create pay grades and pay structures to ensure equitable compensation for similar jobs. Market analysis is not just externally pricing an individual position; it is one step in the overall process of determining a fair compensation structure.

The challenge with market pricing alone is that it only gives companies part of the story: the external value, or base pay, for a position. It does not take into consideration the internal job worth which may not align to the external market because of a variety of factors, including the number of individuals employed by the company, geographical region, budget of the company, as well as specific company position requirements.

Let’s compare an administrative assistant position in a small family-owned business with an administrative assistant in a large corporation. The responsibilities vary; the complexity of the job differs as well as the training and education requirements. It follows that base pay would also differ. A small family-owned business is not going to be able to offer or compete with the compensation package on par with a large fortune 500 corporation. Internal job evaluation helps companies develop and align salary and benefit structures relative to the worth of the jobs within their organization.

What Your Behaviors Say About Your Leadership Style: Are You the Visionary Your Employees Need?

Leadership is simply defined by Merriam-Webster as the “power or ability to lead other people.” With such a simple definition, one may think the ability to lead others is equally as simple, though it is a craft that takes time, skill, and perseverance to develop into an individual that has the ability to lead and influence others. We can think of leadership in personal, political, and professional contexts, but one thing is consistent across all forms: a leader must create a vision of the future and inspire others to make that vision a reality.

In a professional context, what does it take to be an effective leader?  As a Human Resource Management Training and Consulting Firm, we have the opportunity to work with all levels of management in developing their competencies in this area and we’ve found that being an effective leader is something that doesn’t happen overnight. It takes a combination of passion and experience to develop into the leader your employees need. Diagnosing specific areas of development is a critical component in being an effective leader whether you’ve been in a leadership position for a number of months or a number of years.

A tool that we frequently use in evaluating something as simple as individual and group behavioral preferences to self-awareness for leadership development are DiSC® assessments. The DiSC Model of Behavior was presented by William Marston, a physiological psychologist theorizing how normal human emotions lead to behavioral differences among groups of people and predicting how a person's behavior could evolve over time. His work focused on directly observable and measurable psychological phenomena. Over the years, Marston’s theory has evolved into a behavioral assessment that is used to examine personal preferences and educate individuals on how to best interact with others having different behavioral tendencies from their own.

Big Changes Ahead: Are You Prepared for the Proposed FLSA Regulations?

In an article in the New York Times in 2014, President Obama declared that “Americans have spent too long working more and getting less in return.” The notion of fair pay for fair work is something that resonates among those tirelessly pursuing career goals to support their families and achieve that level of self-actualization that Abraham Maslow identified as our highest motivational need. Since 1938, the Fair Labor Standards Act (FLSA) has been the main federal law that protects employees by regulating the pay practices of their employers as it pertains to equal pay, minimum wage, child labor, and classification of exempt vs. nonexempt employment status.

In order to accommodate the ever-changing needs of our workforce, regulations have been proposed that would significantly impact the white collar exemptions from overtime. Ultimately, when the proposed changes go into effect, the provisions will not only help employees to earn more money, but they may make it more difficult for businesses to do business.

Under the current state of the regulations, employers are required to define the pay status of all positions within an organization as either “exempt” or “nonexempt.” An employee is exempt from receiving overtime if they satisfy all of the requirements of a three-pronged test:

Online Learning

To be successful in today’s workplace, everyone – from HR Executives, to Students – should be continually learning and honing their skills. Online learning makes continuing education affordable, accessible, and even fun!  Sign up today!!

Human Resources Report

Our very own Jonna Contacos-Sawyer was recently featured in the Human Resources Report TM. Read the article which explores the role technology will play in HR's future.

*Reproduced with permission from Human Resources Report, 32 HRR 453 (May 5, 2014). Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033)



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