Tracy Emmerich | March 23, 2023
Knowledge sharing–we keep informed so we can keep you informed. The February newsletter brings you an up-to-date article on new employment related legislation that may impact your company based on the number of employees. You may need to take action and modify current practices to meet the new requirement. We hope you find this helpful as we continue to keep you informed and response ready.
In This Issue of Our Newsletter:
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Covered Employers
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Pay Scale Disclosures in Job Postings to Employees and Applicants
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Data Required
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Contract Workers
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Market-Based Compensation Analysis
On September 27, 2022, Governor Newsom signed California’s new pay transparency and pay scale disclosure law. The new requirements went into effect on January 1, 2023, with the first pay data reports due to the California Civil Rights Department (formerly the Department of Fair Employment and Housing) by May 10, 2023. California employers of 100 or more employees and/or 100 or more workers hired through labor contractors must report pay and hours-worked data by each organization, job category, sex, race, and ethnicity to the Civil Rights Department (CRD) annually. https://calcivilrights.ca.gov/paydatareporting/
Covered Employers
Previously, only private employers with 100 or more employees were required to submit pay data reports to the Department if they were already required to file an annual EEO-1 Employer Information Report. Employers were also permitted to submit their annual EEO-1 report to satisfy the state’s pay data reporting obligations. Now, all private employers with 100 or more employees will be required to submit pay data reports, without regard to federal EEO-1 reporting status, in a separate report.
Employers with 100 or more total employees, with at least one employee in California, must also include remote employees in the pay data reports if the employees are assigned to a California business, regardless of whether they live in California, or the employees live in California but are assigned to department or location in another state.
In addition, under the new law, employers with multiple locations must submit separate reports for each location the organization operates. Employers will no longer be required to submit a consolidated report that includes all employees across multiple locations.
Pay Scale Disclosures in Job Postings to Employees and Applicants
Upon request, employers are required to provide the pay scale (salary or hourly wage range) to an employee currently working in the position and provide the pay scale for a position to an applicant applying for employment. Additionally, for employers with 15 or more employees, all job postings, including third-party postings, must include the pay scale for the position. An hourly rate can also be given if there is no range.
Employers are required to maintain records of all employees’ job titles and wage rate history for up to three years after termination.
Data Required
Employers’ pay data reports are to be based on a single pay period from October through December of the previous calendar year. The pay data report must break out the number of employees by race, ethnicity, and sex in a series of job categories, and must report the number of employees by race, ethnicity, and sex whose earnings fall within each of the pay bands prescribed in the Bureau of Labor Statistics’ Occupational Employment Statistics survey. There is a new requirement that employers identify the median and mean hourly pay rate for each combination of race, ethnicity, and sex for each job category.
Contract Workers
The new law also requires private employers with over 100 employees to submit a separate pay data report covering contract workers hired through a third party including the ownership names of any labor contractors who supplied workers in the previous year.
Market-Based Compensation Analysis
California law prohibits asking a job applicant for their salary history to determine a position’s salary range. Employers are allowed to ask applicants what their salary expectations are for the position they are applying for or if the applicant’s salary expectations match the range posted in the job announcement.
The best way to prepare your salary strategy is to conduct a market-based compensation analysis based on the job, region, function, relative value, and industry. With insider access to multiple accurate, up-to-the-minute market data systems, Leap Solutions can partner with you to update your pay scales (and job descriptions, job tiers, and job families as needed) and establish a compensation system that will help you meet the new legal requirements.
A market-based compensation analysis will help you:
• Develop salary and hourly pay ranges to address wage transparency regulation
• Evaluate pay in comparison to competitors
• Create benchmarks so that you know the relative value of a position and where your employees fit into that scheme
• Recognize and reward high value contributors by ensuring that they are receiving competitive pay
• Assess internal pay equity to determine if there are historical gender, race, and/or ethnicity disparities
• Gain employee confidence that a fair pay system is used to determine wages
• Forecast salary budget for planning and to ensure that it aligns with the organization’s goals
• Maintain a competitive advantage by using current business intelligence
Are You Ready to Leap?
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Leap Solutions is a diverse group of highly skilled management, organizational development, and human resources, and executive search and recruitment professionals who have spent decades doing what we feel passionate about helping you feel passionate about what you do. Our HR specialists can help you get a handle on the ever-changing COVID-19 guidelines, programs, and legislation that may impact you and your employees. We are available to work with you to develop practical solutions and smart planning decisions for your organization’s immediate, near, and long-term needs.
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Tracy Long | September 8, 2021
By Tracy Emmerich and Tracy Long
Finding and retaining top talent is a core strategy of all businesses. Without a top-notch team of people dedicated to delivering on the promises of the organization, the most well-conceived business plan is not sustainable. Total rewards are key to ensure you are rewarding and recognizing your talented team. At Leap Solutions, we support our clients in the development and implementation of their total rewards plan and systems. As you read the newsletter, consider how you recruit and retain your team, what is working, and what needs to be strengthened. Finally, consider what your best would look like when you have all the top talent you need delivering on your promises.
In this issue of our newsletter:
- Recruitment and Retention
- Total Rewards Defined
- Total Rewards Strategy
- The Changing Workforce
- Pay Equity
- Compensation Analysis
Recruitment and Retention
The signs are everywhere – HELP WANTED… Now Hiring!…Hiring Bonus!
Labor shortages caused by instability in sectors like leisure and hospitality are compelling people to seek different career opportunities. Parents (mainly women) laid off and caring for their children have either not returned to the job market or are finding alternatives that provide a better work/life balance. And there’s the trending concern about the “great resignation,” predicted to create a Turnover Tsunami (HR Magazine, Summer 2021, Society for Human Resources Management) of employees who wanted to protect their income during COVID and are now burned out, dissatisfied with their employers’ return-to-office policies, and/or are just looking for better opportunities.
Employers are struggling to find, motivate and retain top talent. So, what is the key to recruiting and retaining employees? Assessment of your recruitment and retention issues — effective onboarding, meaningful work and relationships, and well-trained supervisors — are musts, and as is evaluating your organization’s total rewards strategy.
Total Rewards Defined
Total rewards are a combination of direct and indirect compensation.
Direct compensation includes base wages of hourly pay, salary, or piece rate; differential pay (for example shift pay); commissions; bonuses; and incentive pay.
Indirect compensation includes health and welfare benefits, medical, dental, vision, short- and long-term disability; retirement and other long-term benefits like 401(K) match, SEP IRAs contributions, HSA contributions, profit sharing, and stock options; paid leave such as vacation, PTO, sick, holidays, and bereavement; and perquisites (perks) like employee discounts, training and development opportunities, social or gym memberships, childcare assistance, pet insurance, recognition programs, flex-work, casual Friday, and more.
Total Rewards Strategy
Developing a total rewards strategy requires knowledge of employee motivations and desires. For example, twenty-nine percent of employees say that their mental/emotional health has deteriorated as a result of the pandemic (Willis Towers Watson Survey 2020 Global Benefits Attitudes Survey). This is a significant number that can even be higher for essential workers and not something that many have paid attention to in the past.
Additionally, your strategy needs to be in alignment with the company’s goals. What is your value proposition? Are you the low-cost leader or are you pioneering innovative products or services? In what phase of the life cycle is your organization? Are you a start-up that places value on basic benefits and wages, but emphasizes high incentives, or are you a mature business that values expanded benefits including perks and bonuses? Your answers help you decide to lead, match, or lag the market in pay and benefits.
The Changing Workforce
Selecting the ‘rewards’ of total rewards should be reflective of:
- your company’s values
- the nature of work (in office or work from home)
- employees’ changing expectations regarding pay transparency, stability, well-being, and flexibility
- employee demographics and the employee behaviors that you are trying to encourage
Don’t assume one size fits all. Rewards should span the employee life cycle, from accommodating single employees just entering the job market, to mid-career with families, to those nearing retirement.
Total rewards are not just for full-time employees anymore. Employers embracing part-time employees will find a larger pool of potential employees who can be more committed than their full-time counterparts.
Pay Equity
Many companies are realizing that pay equity issues are built into existing systems and require concerted efforts to eliminate inequities. California, Oregon, and Washington are among several states that have banned employers from asking job applicants about their salary history; questions which can reinforce and perpetuate pay inequality. Inequities can be identified through annual reviews of wages.
Work from home has created its own pay equity issues. Employers have primarily based pay on the location of the employee. For example, if you have lived in a lower cost of living area, you have typically been paid a lower wage based on that area, and vice versa. Employers allowing their workforce to work from anywhere must decide pay based on location (where the employee lives or where their home office is located), pay based on the type of position and level of qualification, or a combination of the two. Complicating the location issue is nomadic employees who may work in multiple locations throughout the year while companies allow employees to work remotely.
Compensation Analysis
A good rewards strategy ensures that you have relevant, up-to-date market information to make compensation decisions. To remain competitive, semi-annual or quarterly reviews should now supplement annual wage reviews. Hard-to-fill positions or Hot Jobs may require more frequent analysis. Even if your overall strategy is to match the market, you may want a separate strategy to lead the market for certain positions that require you to be more competitive.
Leap Solutions Group Can Help
Developing a total rewards strategy is a thoughtful, deep dive process that requires understanding your business, your reward philosophy, employee needs (now and in the future), and the changing environment. Recruiting and retaining talent remain a challenge for the foreseeable future. The cost is too high not to have a well-thought-out strategy that positions you as an employer of choice. Leap Solutions Group is here to help you evaluate and develop your total rewards philosophy, assess your current compensation and benefit offerings, and create solutions for a thriving workforce.
Give us a call so you can take that help wanted sign out of your window!
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Leap Solutions is a diverse group of highly skilled management, organizational development, and human resources, and executive search and recruitment professionals who have spent decades doing what we feel passionate about helping you feel passionate about what you do. Our HR specialists can help you get a handle on the ever-changing COVID-19 guidelines, programs, and legislation that may impact you and your employees. We are available to work with you to develop practical solutions and smart planning decisions for your organization’s immediate, near, and long-term needs.
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