Quick Hits - July 6, 2022 - American Society of Employers - ASE Staff

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Quick Hits - July 6, 2022

Should pay be cut for remote work? Remote work could be considered a priced-out benefit.  The latest edition of McKinsey's American Opportunity Survey queried 25,000 Americans in spring 2022 and it found that over half (58%) had the option of working from home at least one day a week.  One in three said that, if they wanted, they could work from home five days a week. And when workers are given the option of remote working, 87% of them will take it. Unsurprisingly, according to McKinsey, the "vast majority" of employed people in computer and mathematical occupations report having remote-work options, and 77% report being willing to work fully remotely.   The researchers noted that even those industries with lower overall work-from-home patterns "may find that the technologists they employ demand it." And once one part of the workforce is allowed to work remotely, it becomes harder to say 'no' to the rest.  However, if pay were reduced for remote employees, it could increase pay gaps and pay disparities, even if the employees voluntarily take the cut for the remote work.  The value as a percentage of pay needs to be reviewed since it would not be close to equal in real dollar world. Also consider, does in-person work include commuting pay?  Source: ZDNet 6/26/22

Is COVID exempt from WARN Act notices? As manufacturing employers are well aware, the COVID pandemic has forced many employers to furlough or layoff employees. Some operations were closed altogether, while others furloughed employees for various periods of time. Often those layoffs or furloughs were longer than initially anticipated and, in some circumstances, triggered the WARN Act, requiring the employer to provide the employees suffering job loss with 60 days' notice of their termination. Often COVID related shutdowns or layoffs were necessary on short notice and employers did not always have the ability to provide 60 days' notice to the laid off employees. The WARN Act provides for a few exceptions to the notice requirement that excuse non-compliance with the 60-day notice requirement, including a "natural disaster" exception. The First Circuit Court of Appeals recently decided whether COVID related layoffs qualify as a "natural disaster" under the WARN Act.  The court ruled that it was not under the Act and that the employer violated the WARN Act.   Although the U.S. DOL has some guidance that it may fall outside of the WARN act, be careful if COVID is an excuse for any plant shutdown in the future to not follow WARN act requirements.  Source: Foley & Lardner 6/17/22

Employers should be transparent about pay: Inflation isn't likely to abate anytime soon, so it may well be inevitable that your employees will ask about boosting compensation to keep up.  Two-thirds (66%) of workers say inflation has outpaced salary gains they've made in the past year, with salaries on average jolting 5% for U.S. workers, according to the latest report from compensation management software solution company Beqom.  The issue for employers, as well as the economy at large, is a wage-price spiral that locks in more inflation. Yet employees won't stay if they fall behind on wages.  Around 61% of people say they are more likely to apply for a job that includes a salary in the job posting, according to the report. Beyond a high salary, employees are more likely to accept roles that offer unlimited paid leave (69%) and more flexibility in working location (68%), according to the Beqom report.  Source: Inc.

Employers are moving back to formal compensation structures: More organizations are adopting a formal base pay structure amid a tight labor market and increasing focus on pay transparency and equity, according to WorldatWork’s 2022 “Compensation Programs & Practices Survey.” Nearly 90% of the 1,064 respondents said their organization uses a formal base pay structure and almost half of those without a structure are considering putting one in place. Additionally, 16% of organizations report increasing the frequency of adjusting pay structures in the past 12 months and 67% of organizations reported they are adjusting base pay structures once per year, which is a five-percentage point increase from 2021. 38% of organizations have increased the frequency of market pricing jobs in the past 12 months.  Only 25% of organizations vary their compensation philosophy application by country or region and just 21% do so for performance management application.  20% of organizations cite an increase in the variation in pay increases between top and bottom performers in the past 12 months.  And only 8% of organizations say management does not evaluate pay program effectiveness, a 50% decrease in just one year.  Source: CCH 6/28/22

C-Suite the next wave of the great resignation? In addition to over half of employees who are ready to leave their jobs due to burnout, nearly 70% of the C-suite also said they are seriously considering quitting current roles in favor of a job that better supports their well-being, according to new research by software company Deloitte.  “The number one thing these findings prove is that the C-suite is human too,” says Jen Fisher, Deloitte’s chief well-being officer. “None of us were spared from what has been going on for the past two and a half years.” 63% of employees and 73% of the C-suite report that their job doesn’t allow them to take time off from work and disconnect, the data found. This has led to 68% of employees and 81% of the C-suite saying that improving their well-being is more important to them than advancing their career right now. Just about half of employees and two-thirds of the C-suite say they utilize all of their vacation time, take breaks during the day, get enough sleep, or even have enough time for friends and family.  Source: EBN 6/28/22

Financial wellness training is more important than ever:  Workers — even those making comparatively high salaries — are struggling financially, a WTW survey of more than 9,600 U.S. employees found. The June 16 results revealed that 41% of workers said they are living paycheck to paycheck (compared to 38% in 2019), including 36% of workers making $100,000 or more. The financial slip represents a dramatic leap for the latter group, only 18% of whom were living paycheck to paycheck in 2019. Employees said they’re struggling to access and pay for basic needs, the survey found, including housing (23%), healthcare (22%) and healthy food (19%). Major financial shocks have played a part; 31% of workers incurred a significant medical expense, 15% were victims of a financial fraud or scam, and 13% were hit hard by divorce or separation expenses.  The link between financial stability and overall well-being has become even more precarious as employees fret over inflation, economic instability, and workplace challenges,” Mark Smrecek, senior director of WTW’s retirement division, said. “Employees are now looking to their employers for support. Employers, in turn, can help employees weather the storm and enhance their financial stability by factoring in well-being when considering programs.” Source:  HR Dive 6/29/22

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