The number of companies freezing salaries is down for the second year in a row, and the downward trend is expected to continue into 2012, according to results from Aon Hewitt’s annual U.S. Salary Increase Survey. In 2011, 5 percent of organizations froze salaries, compared to 21 percent in 2010 and nearly half (48 percent) in 2009. For 2012, 4 percent of employers anticipate a salary freeze.
As the economy improves, salary increases are slowly expected to return to prerecession levels, according to the 38th Annual WorldatWork Salary Budget Survey released July 2011. Among the report’s key findings, employers increased salary budgets by 2.8 percent in 2011. Looking ahead to 2012, salary budgets are projected to rise by 2.9 percent. Persistent unemployment rates continue to play a significant role in keeping salary budget planning at modest levels.
Among the industries with the lowest projected salary increases for 2012 is education (2.6 percent). The energy/oil/gas, real estate, construction/engineering, telecommunications and not-for profit industries expect stronger increases ranging from 3.2 percent to 3.6 percent.
—“More U.S. Employees to Get Raises as Pay Freeze Thaws,” by SHRM Online staff, SHRM Web site, July 7, 2011.
—“Salary Increases Stay Consistent with Recent Trends, as the Focus Remains on Variable Pay,” WorldatWork Newsline, WorldatWork Web site, Sept. 1, 2011.
Six hundred and sixty-three teachers earned raises or bonuses for receiving the top rating of “highly effective” in the District of Columbia’s IMPACT teacher evaluation system. At the same time, 206 others received the bottom two ratings of “ineffective” or “minimally effective” and were fired. This is the second year for the controversial system that uses a combination of classroom observations and student growth measured through test scores to rate teacher effectiveness.
This year’s spread of scores was similar to last year’s, with 16 percent of the district’s teachers earning the top rating. Those teachers were eligible for performance bonuses of up to $25,000 and some qualified for large base pay increases. The district dismissed 65 teachers who earned the lowest rating, “ineffective.” Of those ranked “minimally effective,” 141 were fired because their performance didn’t improve enough over last year.
There were some signs that teacher performance is improving. Of the 566 teachers who earned a “minimally effective” rating last year, 58 percent earned an “effective” or “highly effective” rating this year. Also, the majority of teachers, 69 percent, scored at the highest levels in the system. The D.C.’s chancellor of schools contends that the additional feedback the system provides is helping teachers develop.
The system has been criticized by the local teacher union as too punitive, not focused on teacher improvement, and unfair to teachers who work in the city’s most disadvantaged schools.
—“D.C. Evaluations Target Hundreds for Firing or Bonuses,” by Stephen Sawchuk, Education Week, July 15, 2011.
Department of Labor (DOL) Secretary Hilda Solis recently signed a memorandum of understanding with the Internal Revenue Service (IRS) to improve agency efforts to end the misclassification of employees. The memorandum will allow the DOL to share information and coordinate law enforcement with the IRS in an effort to level the playing field for law-abiding employers and ensure that employees receive the protection that federal and state laws provide. Several states have signed similar memoranda (Texas is not one of them).
“This agreement takes the partnership between the IRS and Department of Labor to a new level,” said IRS Commissioner Doug Shulman. “…We will work together more efficiently to address worker misclassification issues and better serve the needs of small businesses and employees.”
Attempts to change, obscure, or eliminate employment relationships are suspect if they are used to evade compliance with federal labor laws. Employers that misclassify employees as independent contractors for the purpose of denying them the rights and benefits due to regular employees could find themselves on the agencies’ radar.
The agreement arose as part of the DOL’s Misclassification Initiative which was launched under the auspices of Vice President Joe Biden’s Middle Class Task Force with the goal of preventing, detecting, and remedying employee misclassification.
—“DOL, IRS Coordinate on Employee Misclassification Compliance,” by SHRM online staff, SHRM Web site, Sept. 21, 2011.