With new state and federal laws going into effect around payment of employees, now is a great time to look at your overall compensation strategy. As a reminder the new laws include:
- Connecticut Minimum Wage Increase – First increase effective 10/1/19, next one 9/1/20
- Federal Fair Labor Standards Act – January 1, 2020
- Connecticut Paid Leave – January 1, 2021 for 5% payroll deductions
Although you must be compliant with these new laws, there are other areas within the compensation cycle that you should review to ensure that you are competitive in the workplace. Your ability to retain your employees and more importantly, to attract new employees with the skills needed in the world of work is impacted by your compensation strategies. Below are some thoughts regarding your compensation strategies that can help you to become an employer of choice:
- Review and update your compensation philosophy as to how you will pay to remain competitive in the marketplaces where you compete.
- Develop a strong brand and be clear about what you pay, how you pay and why you pay.
- Determine your annual increase strategy: COLA, Performance Based, more than annually, pay for STARS.
- Determine who your competition is by looking at where you are drawing employees from and where you are losing employees to. That is your competition.
- Determine the total rewards that exist in your company. Include cost of benefits, incentives, special programs, training programs, other items that the company pays for the employee.
- Create a Total Rewards Benefit Statement for each employee.
- What does your pay mix look like? Base, bonus, incentives, performance, profit sharing. Is the total rewards package satisfactory for your business?
- What does your company find most important? Design your compensation strategy to support:
- Attracting employees
- Motivating employees
- Engaging employees
- Retaining employees
- Consider rewarding employees more often than annually.
- Maintain transparency on how you pay and what you pay for.
It can be daunting to implement all of these new laws and regulations in time to meet all the deadlines. Getting help from an outside organization may help you to make sure that you have the best programs in place and that all your documents and compensation plans are in order. Employees will be happier if they totally understand the new programs and their managers are prepared to explain the new changes.
KardasLarson has a team of compensation professionals that can help you to navigate your way through all the changes to ensure that you are compliant with the new laws and that your compensation programs are doing exactly what they should do to grow your business.