By Kathryn Mayer ||| June 12, 2023

Significant strides have been made in parental leave and family leave benefits programs over the past year, signaling that employers are getting serious about supporting employees in their home lives as well as their work lives, according to the 2023 SHRM Employee Benefits Survey.

Paid maternity and paternity leave each saw 5-percentage-point jumps from last year and are now offered by 40 percent and 32 percent of employers, respectively, the new report finds. SHRM Research's survey of 4,217 HR professionals at organizations across all sizes, industries and sectors was conducted from Jan. 17 to March 8, 2023. The findings were released June 12 at the SHRM Annual Conference & Expo 2023 in Las Vegas.

[For detailed charts filterable by industry, organization size and location, SHRM members can view the full 2023 Employee Benefits survey results interactive online tool: shrm.org/benefits]

Simultaneously, paid parental leave is now offered by roughly 4 in 10 employers (39 percent), a 6-point jump from last year, according to this year's survey. Paid adoption leave also jumped by 6 percentage points, with about a third of employers (34 percent) now offering it, and paid foster child leave is now offered by 25 percent of employers, representing a 3-percentage-point increase.

"Paid leave for new parents increased across the board," said Daniel Stunes, manager of research operations with SHRM Research.

That's likely because benefits are "all about family this year," added SHRM researcher Cal Engstrom. "Prior to the pandemic, a lot of benefits had been about focusing on individuals. But when COVID-19 hit, a lot of employers started to think about benefits that help not just their employees, but their loved ones as well."

SHRM's survey results come as several organizations have recently enhanced parental leave benefits. In April, media company Thomson Reuters, a global firm with 26,000 employees, announced a 16-week paid parental leave program. The global benefit grants eligible employees who are welcoming a new child into their family through birth or adoption at least 16 weeks of paid time off, regardless of the employee's gender, sexual orientation or marital status. In addition, consumer health care company Haleon in January implemented a 26-week paid parental leave policy for all employees, while last month, global law firm Clyde & Co. rolled out a new parental leave policy, offering employees who have been with the firm for one year 26 weeks of paid leave to bond with a new child.

There are likely several reasons behind the uptick, including rising employee expectations and calls for family leave and flexible time as a result of the pandemic.

In fact, a survey released by insurance provider Unum in December found that paid family leave was among the top three noninsurance benefits U.S. workers most want. Another survey released by online insurance broker Breeze in November found that workers would rather their employer offer paid parental leave than an array of other benefits, including employer-paid fitness or mental health benefits, vision insurance, or student loan repayment assistance.

Paid parental leave is "one of the benefits that, when you need it, it's really, really valuable," Stunes said. "And for employers, it's not super-expensive to the organization, and it's not like everyone's having a baby at the same time. While it can sometimes be difficult for teams to cover someone who goes out on parental leave, it's a one-off thing, and it's so beneficial to the parents."

It's also possible that SHRM's 2022 survey results about parental leave—which found that leave for new parents was closer to pre-pandemic levels after all types of parental leave reached a pinnacle in 2020—made some HR and benefits leaders do some soul-searching and decide to step up their efforts, Stunes said. Last year's survey found that the number of organizations offering paid maternity leave was 35 percent in 2022, down from 53 percent in 2020. The number offering paid paternity leave was 27 percent, down from 44 percent.

Outside of parental benefits, other types of family benefits are growing as well. Paid family leave so employees can care for an immediate family member became slightly more common, with one-third of employers (33 percent) now offering it. Meanwhile, nearly 2 in 10 employers (18 percent) provide paid leave to care for extended family.

Similarly, pet insurance is a growing employee benefit, SHRM's benefits survey found. Nearly 1 in 5 employers (19 percent) now offer it, up from 14 percent in 2022.

"People are considering pet health insurance to be very important," Stunes said, noting that the pandemic spurred a rise in pet adoption, which likely inspired employers to add the benefit. "It is about family—and pets are family. People are recognizing that more and more."

Most Important Benefits

While family and parental leave benefits are becoming more prevalent, employers continue to view health care as the most vital benefit offering, according to this year's survey. Eighty-nine percent of HR leaders said it was "very important" or "extremely important," with virtually all employers (98 percent) offering health coverage to their employees.

What kind of health care coverage are employers offering? Preferred provider organization (PPO) plans remain the most common type offered (by 82 percent of employers), but high-deductible health plans (HDHPs) linked to a health savings account (HSA), health reimbursement arrangement (HRA) or flexible spending account (FSA) continue to gain popularity: 64 percent of employers offer such a plan, up from 61 percent in 2022. Meanwhile, of the 60 percent of employers that offer an HSA as part of their HDHP, 63 percent contribute to their employees' accounts.

Group HRAs are trending downward, from 20 percent in 2019 to 15 percent in 2023, as are medical FSAs, which declined slightly for the second year in a row, to 62 percent.

Tied for the second-most important benefit were leave and retirement savings and planning—81 percent of HR leaders said those benefits were "very important" or "extremely important." In general, the retirement landscape has changed little since 2022, the survey found, with the vast majority of organizations (94 percent) continuing to offer a traditional pretax defined contribution plan, such as a 401(k), 403(b) or 457(b). Of these employers, 84 percent provide a matching contribution, with an average maximum percentage salary match of 7.02 percent.

Post-tax Roth retirement options continue to grow in popularity, jumping 3 percentage points to 71 percent this year. Of the employers that offer Roth plans, about 3 in 4 (74 percent) also provide employer matching, with an average maximum percentage salary match of 6.69 percent.

Flexible work arrangements are also one of the top benefits offered by employers, the survey found—and for good reason. The pandemic spurred widespread adoption of flexible and remote work options, and it seems the majority of employers aren't turning back. Seventy percent of employers said flexible work is very or extremely important—the same percentage as in 2022. Although that's lower than in the thick of the pandemic—83 percent of employers said it was very or extremely important in 2020/2021—it's a significant increase from before the pandemic, when just 49 percent of employers cited the benefit's importance.

Other Benefits Changes

Also new this year? Perhaps in response to the Supreme Court's reversal of Roe v. Wade last year, 11 percent of employers said they are reimbursing employees for domestic travel expenses related to seeking medical care, and 6 percent are doing so for international travel, according to the survey.

Coverage for weight loss surgery increased by 3 percentage points and is now offered by 28 percent of employers. Meanwhile, coverage for weight loss programs was up only slightly, at 20 percent, down from a five-year peak of 29 percent in 2019.

Financial benefits, awards and bonuses are also in demand this year—likely a result of the financial stress employees are experiencing due to sky-high inflation, coupled with employers making moves to woo and keep workers in an employee-driven job market.

Nearly a quarter of employers (23 percent) said they offer retention bonuses—up from 15 percent in 2019, the last time this benefit appeared on the SHRM survey. And nearly 6 in 10 employers (59 percent) currently offer referral bonuses, up from 53 percent in 2019.

Though still not at pre-pandemic levels, the prevalence of nonretirement financial advice benefits rebounded notably this year. Nearly one in three employers (31 percent) currently offer online or in-person services—an increase of 10 percentage points from 2022.

As the job market continues to be employee-driven, Stunes says employers are realizing that innovative and generous benefits are a good way to attract and retain talent.

"I think companies are really looking for those benefits that are above and beyond," he said. "You expect health care, you expect some kind of leave, but then you see other benefits—maybe pet health insurance, maybe bonuses—and that is what is setting employers apart."

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Source: Society for Human Resource Management (SHRM) 

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/shrm-2023-employee-benefits-survey-paid-parental-family-leave.aspx

May 24, 2023

Weaker annual and long-term incentive awards contributed to sharp slowdown in total compensation increase.

RLINGTON, VA, May 24, 2023 — Chief executive officers (CEOs) at the largest U.S. corporations saw their increase in total compensation slow dramatically in 2022, driven largely by a decrease in annual bonuses and slower growth in long-term incentives, according to a new analysis of proxy disclosures by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

The WTW analysis found total pay for CEOs increased 2.7% in 2022, sharply lower than the 18.3% median increase in 2021. Additionally, the percentage of CEOs who received a reduction in total pay doubled from 21% in 2021 to 42% in 2022. Total pay, as reported in the Summary Compensation Table (SCT) in company proxy statements, includes base salary, actual annual and long-term cash bonuses, the grant-date value of long-term incentives (such as stock options, restricted stock and long-term performance shares), the value of perquisites, earnings from deferred compensation and the change in value of executive pensions.

The analysis, based on 450 S&P 1500 companies that filed proxies disclosing 2022 pay by the end of April, found annual bonuses, which soared by 36.8% in 2021, declined 2.5% last year. While annual bonuses were lower, payouts remained above target (123% of target) in 2022, but this was well below 2021 when payouts were 148% of target. The value of earned long-term incentives rose 10% in 2022 – less than the 44% increase in 2021 but still building on 2021’s significant growth rate. Salaries for CEO increased 3.1% in 2022, following a year in which the average CEO salary remained unchanged.

“CEO pay stabilized last year and is returning to levels typically seen before the pandemic,” said Don Delves, North America leader, Executive Compensation, WTW. “Given the stock market performance and lingering economic uncertainties, the fact that annual and long-term incentives weakened last year demonstrates the pay-for-performance model is working at most companies.”

More companies adding ESG metrics to incentive plans

The analysis also revealed over half of the S&P 1500 companies (56%) reported using an ESG performance measure in their annual incentive plan in 2022, up from 49% in 2021. The use of ESG performance measures in long-term incentive plans, however, remains relatively low – 8% in 2022 compared with 7% in 2021. A subset of 227 S&P 500 companies from the analysis also revealed growing interest in linking executive incentive awards to ESG measures. Twenty-one companies added an ESG measure to their annual incentive plans, while 47 companies expanded their use of ESG metrics. Additionally, 9 companies added an ESG metric to their long-term incentive plans while two companies expanded the use of ESG metrics in their long-term incentive plans.

“We are seeing continued interest by boards in linking executive pay to ESG priorities, particularly those priorities they feel they may be linked to sustainable value creation,” said Kenneth Kuk, senior director, Work & Rewards, WTW. “Many boards of directors see executive incentives as an effective way to hold CEOs and other corporate leaders accountable to meeting ESG goals they believe are most critical to business strategy, such as carbon emission reduction and diverse representation for management and the workforce.”

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

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Source: WTW

https://www.wtwco.com/en-us/news/2023/05/ceo-pay-increased-2-point-7-percent-in-2022-wtw-proxy-analysis-finds

Wage growth slated to return to pre-pandemic levels by 2024

By Megan Henney

U.S. wage growth has slowed sharply over the past year and is on pace to return to pre-pandemic levels by early 2024, according to new data from career site Indeed.

The wage tracker – based on salaries for job advertisements listed on Indeed – showed that salaries were up 5.3% in May compared with the same time one year ago. That is a marked drop from January 2022, when wages were up about 9.3%, suggesting that employers are facing less competition for new hires.

Based on the current trajectory, wage growth will likely return to its pre-pandemic range of about 3% to 4% late this year or early in 2024. 

While the deceleration is broad-based, it is most pronounced in low-wage sectors. Posted pay for that group tumbled to 5.6% in May from 12.5% at the start of 2022. 

"Broadly speaking, it is clear that the largest slowdowns in wage growth are happening in typically lower-paying sectors," wrote Indeed labor economist Nick Bunker, "After growing much more quickly than wages in other segments over the past several years, wage growth for low-wage and middle-wage sectors was identical in May." 

Among the industries that are seeing a rapid decline in wages is the software industry, which has been at the forefront of high-profile layoffs and hiring freezes. Job postings in that sector have plummeted by nearly 60% over the past year, and posted wage growth is currently less than half of what it was in November.

Other sectors proved more resilient. Wage growth among construction jobs remains almost a percentage point above its 2019 average – a "notable" spike given the rapid rise in mortgage rates over the past year, which has led to less residential and commercial development.

The Indeed gauge underscores a separate report from the Labor Department released last week, which showed that average hourly earnings – a key measure of inflation – rose 0.3% in May, in line with analyst expectations. Wages are up 4.3% on an annual basis, the report showed.

The Federal Reserve is closely watching wage growth as it fights stubbornly high inflation with the most aggressive rate-hike campaign since the 1980s. 

Policymakers approved a 10th straight rate increase in May, lifting the federal funds rate to a range of 5% to 5.25%, the highest since 2007.

Although the consumer price index has cooled from a peak of 9.1% in June 2022, it remains about three times higher than the pre-pandemic average despite the rapid increase in rates.

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Source; Fox Business

https://www.foxbusiness.com/economy/wage-growth-is-slowing-rapidly-us-indeed-says

A Wisconsin school district has agreed to pay $450,000 and raise employee salaries to settle the commission’s claims.

Published June 20, 2023 by Kate Tornone

A Wisconsin school district has agreed to pay $450,000 to settle claims it paid female employees less than their male counterparts, the U.S. Equal Employment Opportunity Commission announced Friday.

Verona Area School District paid nine female special education teachers and one female school psychologist less than more recently hired male employees for the same work, EEOC said. Each had comparable or greater experience than a male colleague but was paid $3,000 to $17,000 less.

Additionally, while the female employees’ repeated requests for raises were denied, the district repeatedly negotiated and agreed to salary increases sought by male teachers, EEOC said.

The commission sued, alleging the district had violated Title VII of the Civil Rights Act. To settle the lawsuit, the district agreed to the monetary relief and agreed to raise the salaries of the women involved. It also will review its pay policy, conduct anti-discrimination training and post a notice about the lawsuit, according to the EEOC’s announcement.

“More than 60 years after the Equal Pay Act, it is not only illegal but unacceptable to treat men and women differently when negotiating and setting pay,” said Diane Smason, EEOC’s acting district director in Chicago, in a statement. “The EEOC will continue to vigorously investigate and enforce the law to make sure employees do not face such discrimination.”

The school district’s board of education president, Meredith Stier Christensen, told HR Dive in a statement that the parties worked together to resolve the dispute without going to trial. Additionally, the board in 2021 adopted a new governance model that included the creation of clear, formalized systems to ensure that lawful and equitable hiring and compensation practices are in place, Stier Christensen continued. “As a result of our robust oversight practices, the Board has full confidence that our administration’s proactive steps to achieve this critical outcome have been successful.”

Vice President Jennifer Murphy concurred: “We now have systems in place to effectively eliminate the type of concern raised in the EEOC complaint now and in the future.”

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Source: HR Dive

https://www.hrdive.com/news/eeoc-salary-disparities-ranging-from-3k-to-17k-showed-gender-bias/653414/

You Can Put a Lot More Money Into Your HSA Next Year

By: Pete Grieve | Editor: Julia Glum | Published: May 17, 2023 

The contribution limit for health savings accounts (abbreviated HSAs) will get a large increase in 2024 to adjust for inflation, allowing Americans to save more money for medical expenses.

HSAs are a type of account you can open if you have a health insurance deductible above a certain threshold — $1,600 for individuals in 2024 — and want to grow a cushion for medical expenses.

HSA owners benefit from what's called a triple tax advantage. They can make tax-deductible contributions, therefore reducing their taxable income, and withdraw the funds for eligible expenses tax-free. The earnings also grow tax-free.

HSA contribution limits for 2024

The maximum amount of money you can put in an HSA in 2024 will be $4,150 for individuals and $8,300 for families. (People 55 and older can stash away an extra $1,000.)

The contribution limit is adjusted by the IRS every year, but the 2024 increase is bigger than normal due to inflation. In 2024, the limit will be $300 higher than this year’s limit of $3,850 for individuals and $550 higher than the 2023 limit for families of $7,750.

Maxing out a HSA isn’t feasible or recommended for everyone, but some Americans use them for retirement savings.

Money you put in an account can be invested, which can make HSAs a helpful tool to prepare for medical costs you're likely to incur when you’re older. Qualified expenses include deductibles, copayments and other medical charges; HSAs can also be used to pay for prescriptions, over-the-counter medications, hearing aids and menstrual products. Funds can be used to pay for some Medicare expenses like Part B deductibles.

The limit increase will allow people who are contributing to the max to put even more money into their HSAs next year.

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Source: Money

https://money.com/hsa-contribution-limit-2024/

By HRTech Specialist Last updated Apr 28, 2023

Pearl Meyer has published a new survey that points to a material change in US companies’ use of job titles. The 2023 Pearl Meyer Job Titling Practices Survey includes information for more than 400 public, private, and not-for-profit organizations and shows a substantial shift in the data from the prior edition, published in 2018.

“We have all heard and experienced so much turmoil in the job market over the last few years and much of the emphasis has been on a combination of compensation and flexibility in this war for talent,” said Rebecca Toman, vice president of the survey business unit at Pearl Meyer. “However, our data indicate that companies are also increasingly reliant on job titles as an important component of their strategy.”

More than half of the companies surveyed (54%) are leveraging job titles to attract prospective employees, a 35% increase from 2018. There has also been an increase from 30% to 38% in the use of a job title to determine eligibility for some compensation programs.

“Where we see the most eye-popping numbers is in the significant effort to reward and retain employees through the use of titles,” said Toman. “Thirty-seven percent of respondents are actively applying titles as a way to retain key employees, which is up from 27% in 2018. Further, a third of those surveyed use titles to reward current employees and this is a 74% increase from pre-pandemic levels.”

Signaling a need to retain and reward the existing workforce in the face of a potential economic slowdown, the survey shows a growing number of companies (13%) are explicitly deploying job titles “when funds are limited.”

“Job titles can be practical tools for employers and compensation professionals, but in general, I would not rely on them as a strong retention option unless they are backed up by a pay increase,” said Susan Sandlund, managing director and leadership practice lead at Pearl Meyer. “This data may indicate some employers are recognizing that in the absence of large compensation increases, they need to offer something to key employees. I see this as a somewhat positive development in terms of recognizing there are rewards beyond pay that have meaning to individuals. However, I would counsel organizations to likewise focus on career development opportunities and keep a close eye on maintaining a positive corporate culture. These elements are proven retention tools.”

 Key Findings: Changing Uses or Drivers of Job Titles Between 2018 and 2023

• Recognize and/or reward employees when funds are limited: from 8% to 13%, a 62.5% increase
• Reward current employees: 19% to 33%, a 74% increase
• Retain current employees: 27% to 37%, a 37% increase
• Attract prospective employees: 40% to 54%, a 35% increase
• Determine eligibility for certain compensation programs: 30% to 38%, a 27% increase

Methodology and Availability

Pearl Meyer’s Job Titling survey is conducted periodically; the last survey was published in 2018. More than 400 respondents from public, private, not-for-profit/government chartered organizations contributed data to the 2023 survey. Respondents’ annual revenue, assets, or operating budget ranged from under $100 million to over $30 billion. Results are offered according to revenue and broad industry groupings (industrials/materials; consumer discretionary/staples/services; healthcare; financials; information technology/telecom services; and energy/utilities). Complete survey results include a full list of participating organizations and are available for purchase.

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Source: HR Technology News 

https://techrseries.com/executive-leadership/pearl-meyer-survey-shows-significant-change-in-job-title-practices-pre-and-post-pandemic/

The effects of COVID-19 and economic concerns are causing some workers to delay retirement and some retirees to head back into the workforce.

Published May 4, 2023 | By: Ginger Christ

Dive Brief:

• The confidence workers and retirees have that they’ll have enough money for retirement fell starkly in 2023 — a level of decline not seen since 2008 during the Great Recession, according to the 33rd annual Retirement Confidence Survey released April 27 by the not-for-profit Employee Benefit Research Institute and research firm Greenwald Research. 
• Of the 2,537 surveyed in early 2023, 64% of workers believed they would be able to live comfortably in retirement, down from 73% in 2022, and 73% of retirees shared that confidence, a drop from 77% last year. Workers and retirees attribute their concern to having little or no savings, inflation and debt, the survey found.
• “The confidence both workers and retirees have in their ability to finance their retirements dropped significantly in 2023. … This shows that the current economic climate, in particular inflation, is eroding the confidence that Americans had in their retirement preparations going into the pandemic,” Craig Copeland, director of wealth benefits research at EBRI, said in a news release.

Dive Insight:

The effects of the COVID-19 pandemic and economic concerns are causing some workers to delay retirement and some retirees to head back into the workforce. 

Seventy-one percent of the 2,002 respondents in a survey commissioned by 401(k) plan provider Human Interest said the pandemic changed their target retirement age. Among those who had a “very difficult time” during the pandemic, 71% said they plan to delay retirement. 

“With the pandemic’s after-effects and ongoing inflation, people have had a revelation about retirement,” Eric Phillips, senior director of partnerships and strategic insights at Human Interest, said when the results were released in November. “In the past three years, 42% of employees with a retirement benefit at work say they saw their employer contribution get cut.” 

Some workers are turning to pre-retirement, a transition period between full-time work and retirement, the survey found. 

On the other side, some retirees are rejoining the workforce. Twenty percent of respondents to a Resume Builder poll last year said they planned to return to work that year. Sixty-nine percent attributed that decision to rising costs.

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Source: HR Dive

https://www.hrdive.com/news/worker-confidence-in-retirement-drops/649199/

PUBLISHED MAY 16, 2023

Job seekers’ relocating for new jobs fell to the lowest level on record in the first quarter of 2023, as employers continue to offer remote and hybrid positions and job seekers become unwilling to move for work. Meanwhile, rising interest rates mean buying homes becomes a less attractive option as well, according to data released Monday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

The data comes from a survey of over 3,000 job seekers across the country the firm conducts quarterly.

Relocation For New Jobs Grinds to a Halt

In the first quarter, 1.6% of job seekers relocated for new positions, according to the survey, down from 3.7% in the final quarter of 2022 and 4.6% in the same quarter last year. It is much lower than the 7.5% of job seekers who moved for positions in the second quarter of 2020, the highest since Q4 2018, when 7.7% of job seekers relocated.

 

Source: Challenger, Gray & Christmas, Inc. ©

 

“In the 1980’s and 90’s, nearly a third of job seekers would move for new positions. That has fallen steadily since, as housing costs have risen and companies have moved to where talent pools are located. Now, remote and hybrid positions are keeping workers at home,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

 

Source: Challenger, Gray & Christmas, Inc. ©

 

The reluctance to move is possibly the result of job seeker demand for remote work options, though companies appear to be offering them less often. According to a new Challenger survey conducted online in April and May among 170 companies nationwide, 39% of companies are offering fully remote work options, down from 44% of companies who offered them last fall, and 61% who offered them Spring 2022. Fully remote work offerings peaked in Fall 2022, when 73% of companies offered them to their workers and hires, according to Challenger.

“Many employers are recalling workers to the office, at least for part of the time. Hybrid work is becoming much more common, and job seekers who are holding out for fully remote may have to concede some time to the office,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

In fact, 32% of companies report most of their workers are in the office, though they’re allowing remote work on a case-by-case basis. That is up from 13% who reported this last fall. Of those companies with hybrid options, most workers are in the office two days a week with 29%, while 26% are in 3 days a week. Another 13% are in the office 4 days a week.

“Another reason job seekers have refused to move for work is the cost. With interest rates continuing to rise, mortgage rate increases and persistent inflation, the cost of selling a house and finding other housing may not be worth it to job seekers,” said Challenger.

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Source: Challenger, Gray & Christmas

https://www.challengergray.com/blog/q1-2023-job-seeker-relocation-falls-to-lowest-on-record-as-remote-hybrid-work-persists/

ARLINGTON, VA, March 6, 2023 — Demand for international pensions and savings vehicles is continuing to grow as employers try to optimize their benefits packages for different groups within their global workforce, research by WTW showed today.

WTW (NASDAQ:WTW), a leading global advisory, broking, and solutions company, launched its latest International Pension Plan Survey, which covered 1023 International Pension and Savings Plans (IPPs and ISPs). A quarter (23%) of these were set up in the last five years, reflecting the growth in demand. Assets under management of the surveyed IPPs and ISPs reached US$19.3bn, up 5% from the previous year.

Around half (51%) of the IPPs and ISPs were set up for expatriate workers unable to stay in their ‘home’ country plans, while at the same time either locked out of their ‘host’ country arrangements or likely not entitled to a benefit from any potential ‘host’ plan.

But IPPs and ISPs can also solve savings problems for various other employee groups. One in eight (13%) plans were established to include and serve local employees, often in countries at risk of economic or political instability.

“

Companies are facing skills shortages in many hotspots across the world and are redefining their employee experience and total benefits offer to stay competitive.”

Tony Broomhead | managing director, Integrated and Global Solutions, WTW

Tony Broomhead, managing director, Integrated and Global Solutions, WTW, said: “Companies are facing skills shortages in many hotspots across the world and are redefining their employee experience and total benefits offer to stay competitive. Many multinationals, charities, and international governmental organisations are looking for ways to offer minimum yet sufficient levels of pensions and savings to their global staff.

“Expats are often excluded from joining local ‘host’ pension schemes, or it may be inadvisable for them to do so. And local staff in many countries may also have limited options, or any savings may face the risk of economic instability or local sovereign debt default. International plans are a flexible way for employers to offer these vital benefits in a secure and efficient way.

“Companies are looking at setting up IPP or ISP solutions that can meet and fix multiple pensions challenges within the business. These plans can serve various expat groups, such as foreign staff excluded from local plans like the Central Provident Fund in Singapore, or to reward executives subject to capped ‘home’ country benefits. In the Middle East and GCC these international plans can be used to fund mandatory gratuities.

“More recently these plans can help meet DEI objectives whereby plan sponsors are keen to be able to report that by including an IPP they are now able to offer access to a pension plan to all their global staff.”

The WTW IPP Survey 2023 also found that:

• Of the 1 in 8 plans offered to local employees in countries facing more challenging political and economic circumstances, Egypt was the most popular location for such IPPs/ISPs. 32 plans included Egypt-based savers. Argentina-based employees were in 31 plans, Lebanon 28, Sri Lanka 16, and Ecuador 15.
• ESG considerations are an emerging focus for IPPs and ISPs, with 163 plans indicating that they reviewed the fund range in the past 12 months for ESG considerations, which includes Diversity, Equity and Inclusion audits.
• 71% of plans were established with a 'retirement objective' (IPPs), and 29% have a shorter-term 'savings objective' (ISPs).
• Almost all (94%) IPPs are defined contribution, with employer contribution rates typically ranging from 10% to 14%.
• IPPs/ISPs are offered by companies in all business sectors, but particularly in banking and finance, which accounted for 26% of plan sponsors, followed by oil and gas (9%), and consumer goods and retail (7%).

About the Survey

The WTW International Pension Plan Survey 2023 was conducted in Q4 2022 and covers 1023 IPPs and ISPs sponsored by 955 companies. It is the 15th edition of the survey. Download a free copy here.

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Source: WTW

https://www.wtwco.com/en-US/news/2023/03/global-employers-look-to-creative-cross-border-pensions-to-help-expats-and-local-workers-in-unstable

Feb. 22, 2023, 7:19 AM

Khorri Atkinson - Senior Labor & Employment Reporter

Chris Marr - Staff Correspondent 

A former offshore oil rig worker earning more than $200,000 a year is eligible for overtime pay under federal law, the US Supreme Court ruled.

The high court’s Wednesday ruling upheld a US Court of Appeals for the Fifth Circuit September 2021 decision that former Helix Energy Solutions Group Inc. worker Michael Hewitt wasn’t exempt from the Fair Labor Standards Act’s overtime requirement because the company paid him a day rate and not a guaranteed weekly salary.

The day-rate basis on which Hewitt was paid, “so that he receives a certain amount if he works one day in a week, twice as much for two days, three times as much for three, and so on” doesn’t count as a salary basis to exempt him from the FLSA’s overtime protections, Justice Elena Kagan wrote for the 6-3 majority.

The case has significant implications for the energy industry because of its use of day rates instead of salary rates to compensate workers, including highly paid employees on oil-field or offshore jobs.

The heart of the case comes down to the relationship between the FLSA’s implementing regulations governing overtime pay exemptions for highly compensated executives, administrative, and professional employees.

To be exempt, executives must be paid on a salary basis, meaning their predetermined pay must be “calculated on a weekly, or less frequent basis” and not tied to the hours worked per week. They also must have a minimum pay threshold of $684 per week.

The regulations also say workers paid on an hourly, daily, or shift basis can be classified as salaried, and thus overtime exempt, as long as their employer guarantees “at least the minimum weekly-required amount” despite the number of hours, days, or shifts worked.

Helix argued that, because Hewitt was an executive who received more than the minimum weekly pay and whose compensation never changed, the case should end there.

But Hewitt said Helix never offered him a minimum weekly guaranteed pay, so his day rate earnings can’t be classified as a salary.

Clement & Murphy PLLC represents Helix. Boies Schiller Flexner LLP represents Hewitt.

The case is Helix Energy Sols. Grp., Inc. v. Hewitt, U.S., No. 21-984, 2/22/23.

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Source: Bloomberg Law

https://news.bloomberglaw.com/daily-labor-report/supreme-court-holds-six-figure-worker-entitled-to-overtime-pay