Compensation and Benefits

Compensation and benefits topics – whether it’s minimum wage, workers’ compensation laws, or employee pay – if properly handled, can help you retain workers and recruit new ones.

Use our advice to craft independent contractor agreements that keep independent contractors – and your bosses – happy.

This month's collection of real-world quick tips from American business leaders, brought to you by members of The Alternative Board.

The economy is a shambles, and employers are doing everything they can to stay in business. That includes terminations, salary and wage cuts and temporary furloughs. Nearly every one of those moves carries litigation risk. Have your company’s personnel policies and practices had a checkup lately? A comprehensive audit is one of the easiest ways to spot problems.

Under the Lilly Ledbetter Fair Pay Act of 2009, each paycheck that unfairly pays a worker less than it should is a discriminatory act. Now is the time to audit your pay policies. Involve your attorneys—to take advantage of attorney-client privilege protection while you correct any discriminatory practices you uncover.

Two years ago, Congress passed a three-step boost in the federal minimum wage. On July 24, the last of those increases takes effect, rising another 70 cents to $7.25 per hour. President Obama has advocated increasing the federal wage floor to $9.50 per hour by 2011.

If discrimination has always been a head-in-the-sand issue for you and your organization, it’s time to get serious about your policies and practices. Discrimination complaints of all types—race, sex, age, etc.—have climbed as steeply in the past year as the economy has fallen. Don’t get caught flat-footed.

You don’t have to tolerate foul language ... Customer gripe caused firing? Get it in writing ... Ledbetter Act already spurring more pay cases ... Track when you notify worker of firing ... No signature? Settlement may still be binding.

If you haven’t looked carefully at how you determine compensation, here is another reason to do so soon. Employers that can show a court they set salaries based on logical, fair and unbiased factors are likely to win Equal Pay Act lawsuits. That’s because the EPA outlaws sex discrimination in pay, but allows employers to use factors other than sex to set pay rates.

Commissioned salespeople are hurting in this economy, but their employers may be feeling the pinch, too. Take, for example, Rick Case Enterprise, a company that owns several Broward County auto dealerships.

Employers naturally want to stay out of court. That’s one reason so many organizations have their employees agree to arbitrate claims rather than take them to federal or state court. But if those arbitration agreements aren’t carefully worded, they may be useless.

A bill before the Minnesota Legislature would allow the state to suspend prevailing wage requirements on state-funded construction projects if November budget projections show a 1% or greater deficit. State prevailing wage legislation is patterned after the federal Davis-Bacon Act, which requires federally funded construction projects to pay the “prevailing wage” for specific job classifications.