NewsBrief – December 2024
In This Issue:
Compliance Corner: Washington Rest and Meal Period Guide
Each month, we highlight one of the many resources exclusively available to you as a member of Cascade.
This month, we are featuring our Washington Rest and Meal Period Guide. Washington’s rest and meal periods can be confusing for employers. This guide dives into the specifics regarding rest and meal periods, including when meal periods are unpaid or paid, waivers and variances, and industry specific rest and meal period requirements.
FLSA Salary Threshold Rule Blocked
Cascade Compliance Team
compliance@cascadeemployers.com
Late last week a federal judge struck down the Department of Labor’s (DOL) rule increasing the salary threshold for exempt employees, which was set to increase for the second time on January 1, 2025. Further, the judge also overturned the first increase under this rule that took effect July 1. Accordingly, with this new ruling, it is unlikely that the expected salary increase scheduled for January 1 will take effect, at least for now. The judge in this decision stated that the DOL exceeded its authority when making this rule, citing a recent decision by the Supreme Court of the United States which makes it easier for courts to overturn rules made by agencies they believe are overreaching.
As you may recall, on July 1st, the DOL’s Final Rule regarding “white collar” salary exemptions from overtime requirements took effect. Under the DOL’s new Final Rule, to be exempt from overtime, an employee needed to make at least $844/week ($43,888/year). This amount was set to increase to $1,128/week ($58,658/year) beginning on January 1, 2025. For now, that threshold will drop to what it was before July 1, 2024 and employees will need to make at least $684/wk ($35,568/year) to meet the salary requirements to be an exempt employee. As a reminder, Washington already has a higher threshold than what is required under the FLSA and this ruling does not impact that.
What does this mean for you?
Although the DOL will likely appeal this decision, it is unlikely that any appeal would be heard by January 1, 2025. It is also unlikely that the incoming Trump Administration will prioritize this, meaning for now, employers will need to consider different options moving ahead.
If you have not communicated the increase that was scheduled to take effect January 1, you may want to hold off on any such communication until this issue is resolved. It may be wise to continue to prepare internally in case we get a surprise hearing of an appeal before January 1.
If you have communicated to employees that they may be scheduled for an increase on January 1 due to a change in the law, then you will need to evaluate if you want to follow through with the increase or carefully communicate that the law has been challenged and you are waiting to get a final resolution before making such adjustments. Clearly, each of these options must be carefully considered as each has its own benefits and consequences.
Now, what to do if you adjusted wages in July to comply with the final rule? As mentioned above, the judge struck down both the upcoming increase and the increase that already took effect. This means that technically an employer could reduce wages (subject to state law limitations) to the threshold that was in place previously at $684/wk. This is generally not recommended for a number of reasons. First, negative impact on employees that benefited from the July adjustment would be significant and likely cause great distress and turmoil. Second, there is also a chance that the judge’s decision could be overturned in appeal if and when that appeal takes place. Finally, such a retroactive change may also significantly impact your pay structure and pay equity in your organization.
2024 Compensation Trends and the Year Ahead
Cascade Compensation Team
compensation@cascadeemployers.com
2024 continued the trend of challenging compensation management for organizations. Our National Business Trends Survey echoed this with over 84% of organizations stating ability to pay competitive wages as either a mild or serious problem in both the short term and long term. This stems from many factors.
While the labor market shows signs of cooling compared to recent years, it remains competitive. Some industries are still grappling with worker shortages. Inflation, though lower than last year, still drives pressure for higher salaries to offset rising living costs. This coupled with economic uncertainty, forces organizations to carefully allocate their limited compensation budgets for maximum impact. With all these challenges, 2024 increases remain higher than pre-pandemic levels. Our data sources suggest base pay increase averaging around 4% for 2024, with some variation in the data sources.
In addition to another year of heightened base pay increases, many organizations are needing to take a total rewards approach and really take a comprehensive look at not only base pay, but also variable pay, benefits, career development, and workplace flexibility. A well-rounded total rewards package helps to attract and retain talent in a competitive environment.
Pay compression (minimal salary differences between employees with varying experience and skills) and salary inversion (new hires earning more than current employees in similar roles) were major compensation issues in 2024. These can impact employee morale, turnover, and pay equity. Minimum wage increases and market demands for higher wages can exaggerate these issues. To mitigate these issues and ensure pay equity and transparency, a data-driven compensation program backed by a clear philosophy and strategy is crucial. This approach will be essential in 2025 and beyond.
2025 will likely bring similar challenges, at least initially. Projected salary increases are slightly lower, averaging 3.9% with variations in the data. Pay compression will likely remain a challenge for many industries, particularly those with lower wages.
Addressing pay equity and transparency will remain important as legislation continues to expand. Additionally, workplace flexibility will remain a key component of a competitive total rewards package.
Cascade Employers Association: Your Partner in Compensation Management
We are here to support you in navigating the remainder of 2024 and whatever 2025 may bring. Contact us at compensation@cascadeemployers.com for assistance.
Innovative Ways to Enhance Employee Satisfaction Without Breaking the Budget
Margaret Oglesby, Compensation Consultant
compensation@cascadeemployers.com
In a time of tight budgets, companies may struggle to offer substantial salary increases while still wanting to keep employees engaged and satisfied. While salary raises are important, exploring alternative recognition methods can significantly improve employee morale, engagement, and retention without breaking the bank. Here are several cost-effective alternatives to traditional pay increases that companies can explore:
- Flexible Work Arrangements:
- Offering remote or hybrid work options gives employees greater control over their schedules.
- Flexible hours can improve work-life balance, reducing stress and enhancing productivity.
- Employees often appreciate the autonomy and flexibility more than financial compensation alone.
- Additional Paid Time Off:
- Providing extra vacation days, mental health days, or half-day Fridays can increase overall job satisfaction.
- This benefit shows the company values employees' well-being, helping to reduce burnout and improve morale.
- Professional Development Opportunities:
- Sponsoring employees' access to training programs, workshops, or certification courses adds value to their career growth.
- Offering internal mentorship programs fosters a culture of learning and growth, building loyalty and engagement.
- Skill-building opportunities also align with personal and professional goals, leading to increased retention.
- Frequent Recognition and Appreciation:
- Regularly acknowledging employee achievements through verbal recognition, company newsletters, or public praise in meetings fosters a positive work environment.
- Implementing peer recognition programs encourages camaraderie and teamwork.
- Simple gestures like personalized thank-you notes or small rewards can make employees feel appreciated and motivated.
- Workplace Perks and Wellness Programs:
- Low-cost perks such as free snacks, wellness programs, or casual dress days can enhance the office environment.
- Providing access to wellness initiatives like yoga classes, gym memberships, or wellness challenges demonstrates care for employees' health and well-being.
- Job Enrichment and Role Expansion:
- Offering employees opportunities to take on new responsibilities, lead projects, or cross-train in different departments can improve engagement.
- Allowing employees to contribute ideas for company initiatives creates a sense of ownership and investment in the company’s success.
While salary increases remain important, integrating these alternative methods of recognition can lead to increased engagement, job satisfaction, and retention. These strategies show employees they are valued, even when budget constraints limit the ability to offer significant pay raises.
Hot Compliance Question
Cascade Compliance Team
compliance@cascadeemployers.com
Question: We accidentally paid an employee twice during one payroll cycle. Before we realized what happened, our employee cashed both checks. Can we deduct the entire amount of the overpayment from our employee’s next paycheck?
Answer: It is risky taking a deduction like this from an employee’s paycheck. A federal court case determined that such deductions are illegal under the Oregon statute. However, the Bureau of Labor and Industries (BOLI) has stated that they will not pursue any claims an employee files when the employer is entitled to reimbursement for an overpayment of wages.
To avoid a civil case against you, the best option in this situation is to set up a payment plan for the employee to reimburse the employer outside the payroll system.
Win up to a $595* Scholarship for Your HRCI Certification Exam Fee – Boost Your HR Career!
By Sheryl Kelsh, Membership Development Manager
skelsh@cascadeemployers.com
Are you planning to earn your HRCI Certification in 2025? This holiday season, Cascade has an exciting opportunity for you! Enter our HRCI Certification Exam Scholarship Drawing and take a bold step toward elevating your HR career.
Here’s How to Enter:
- Email membership@cascadeemployers.com.
- Include "HRCI Certification Drawing" in the subject line.
- Submit your entry by December 16, 2024.
The lucky winner will be announced on December 18, 2024, and once awarded the scholarship you’ll have 180 days to take your exam.
Why Earn HRCI Certification?
In the ever-evolving HR landscape, staying ahead is essential. An HRCI certification, recognized globally as a hallmark of HR excellence, validates your expertise and commitment to the profession. It’s more than a credential, it’s your gateway to new career opportunities.
Certified HR professionals often experience:
- Enhanced earning potential – Certified HR professionals earn an average of 31.6% more than their peers.
- Greater job opportunities – Employers increasingly list PHR/SPHR certification as a “preferred” or “strong plus” in job descriptions.
- Faster promotions – Certification increases your likelihood of promotion by up to 25%.
Benefits Beyond the Drawing
Even if you don’t win the scholarship, being a Cascade member offers you incredible advantages:
- Up to 12 Recertification Credits per three-year HRCI renewal cycle, simply for maintaining your Cascade membership.
- A $50 discount on exam fees for PHR, SPHR, GPHR, aPHR, or PHRca certifications.
- Access to Cascade training classes, which provide even more recertification credits.
This drawing is just the beginning. With Cascade and HRCI, you’re investing in your future with resources and rewards that extend well beyond the holiday season.
Don’t miss this chance! Email us today to enter the drawing and set yourself up for HR career success in 2025 and beyond. Together, let’s make your professional goals a reality!
*Scholarship includes both HRCI exam and application fee. The amount of scholarship is based on the HRCI certification applied for. The scholarship is non-transferable and cannot be exchanged for cash.