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Employers in the U.S. are planning to raise salaries an average of 3 percent in 2015, showing little movement in salary budgets over the past year, according to three different projections.
However, this figure could increase as stronger wage gains are predicted with the economy's improvement and other influences affect pay rates in the remainder of the year and early next year.
Preliminary results of Mercer's “2014/2015 U.S. Compensation Planning Survey” obtained by Bloomberg BNA July 21 show projected salary increases of 3 percent for 2015. More than 1,500 organizations provided data for the survey, according to Mercer.
Similarly, U.S. employers plan a median base salary increase of 3 percent in 2015, according to the preliminary findings of WorldatWork's “2014-2015 Salary Budget Survey,” published July 8. More than 5,200 employers worldwide participated in the survey, which also reported expected wage hikes in 16 other countries, the organization said.
Hay Group also issued a prediction of a median base salary increase of 3 percent in 2015, according to a July 9 news release. The results are based on forecasts made from data provided by more than 400 U.S. organizations, the release said.
“With typical base salary increases still below pre-recession levels, organizations are walking a fine line between maintaining a focus on managing their labor costs given the still-mixed economy, while also improving employee engagement and retention levels,” said Tom McMullen, Hay Group's North American reward practice leader.
Complicating the salary budget process are efforts to raise the minimum wage in a variety of states and localities, as well as nationally. Employers paying a large number of workers at or just above the current minimum wage would be most affected by these efforts.
Following a presidential directive, the Labor Department is reviewing criteria for determining exemptions from overtime pay under the Fair Labor Standards Act. Proposed rules, which are expected to increase the minimum pay level that is used to help determine exempt status, are scheduled to be released in November.
In some states, changes also may increase the minimum salary base for exempt status from overtime pay and minimum payments for commission-based employees, said a July 8 analysis, “Emerging Trend Toward Higher State and Local Minimum Wages,” by Buck Consultants. Another consideration if wages are raised is a corresponding increase in payroll taxes.
These increases mean employers would have to find ways to manage their pay structures, especially for the next level of jobs above minimum wage positions, which would feel the most pressure for a corresponding pay raise, Buck Consultants said.
To contact the editor responsible for this story: Christine Pulfrey at email@example.com
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