For example, both the benchmarked and nonbenchmarked data show a decline in employment from December to January as businesses lay off temporary holiday workers, but the benchmarked data decline more steeply than the nonbenchmarked data during this period (Chart 1). In contrast, historical payroll employment numbers, referred to as benchmarked data, offer revisions to these estimates using more comprehensive data. Adjust your employee’s pay amount in your payroll software (or manually if five reasons to outsource back-office accounting functions that’s how you run payroll).
Changes in wage and hour laws
How a fast-growing tech company cut HR costs by 60% while managing teams across 20 countries. Malaysia tech company consolidates HR tools and cuts expense processing with Omni HRIS. Also, it’s beneficial to have records in case you are ever sued or if the government investigates your business. You need to explain your reason to the employee. By seasonally adjusting the data separately, a more accurate view of the trends in the series emerges.
- This adjustment ensures fairness across the company, while individual performance reviews will continue to determine merit-based increases.
- They serve as incentives for employees who consistently excel.
- You may need to use a one-time negative adjustment to correct an overpayment mistake.
- There are a lot of reasons you might need to adjust your payroll.
This change may also come with a new job title or exemption status.
TriNet Team
This could happen during busy periods or if another employee is temporarily unable to work. For example, the annual cost of living may have increased by 5% in one state and 10% in another. As well as damaging morale, a high employee turnover can result in significant recruitment, onboarding, and training costs. Many companies review their whole workforce’s pay on an annual or biannual basis. Enterprise-grade security with ISO 27001, GDPR certifications, and local data residency options. The process should enhance current employee satisfaction and attract potential talent.
Administering salary adjustments requires focusing on many different areas to ensure the calculation and implementation align with the business objectives. Ensure employees do not perceive favoritism or unconscious bias during salary adjustments by establishing clear guidelines and criteria. Equity adjustments are made to ensure pay parity and fairness among employees within an organization.
For payroll software that adjusts payroll easily, explore Hourly today. An adjustment can either be positive (paying more money) or negative (reducing pay). Payroll software like Hourly makes it easy for management or human resources to set up adjustments whenever you need them. You can tell employees in person, ask managers to notify them, or write an email with the details. As an employer, it can feel good to provide employees with raises or bonuses. There are a lot of reasons you might need to adjust your payroll.
- Positive adjustments, like overtime, bonuses, and raises, are more common.
- Singapore Health tech Lucence reduced payroll processing time and grew their headcount with Omni’s automated HRIS.
- Transparency around market benchmarking, internal pay structures, and company policy can help employees understand how salary adjustments are determined.
- Let the employee know when the change goes into effect.
- Poor communication often leads to misunderstandings and disgruntled employees.
Harnessing HRIS for Efficient Salary Adjustment
Let’s explore the types of salary adjustments to ensure comprehensive coverage for employee satisfaction. These adjustments ensure employees’ salaries reflect their roles and contributions within the company. Internal adjustments refer to changes within a company that impact employees’ salaries, such as shifts in job responsibilities or company structure. When you run payroll, double check the employee’s wages to make sure you correctly made the changes.
Employee Pay Adjustment: A Definitive Guide to Effectively Manage Changes in Wages
Alternatively, wider economic conditions may be a factor when determining a change in pay. This may involve either increasing or decreasing an employee’s compensation. Saray has strong managerial and business leadership skills, making her a relentless force in solving company issues. Each market has local support teams and built-in compliance features. To explore why Omni is the preferred tool for modern businesses aiming to cultivate an inclusive and fair culture, book a demo with our team today.
Quick Facts About Salary Adjustments in 2025
Unplanned or poorly managed salary adjustments can lead to financial strain. If managers are allowed to hand out pay rises without oversight, favouritism can creep in, and businesses may unknowingly violate pay equity laws. Salary adjustments play a crucial role in retaining talent and maintaining fairness, but when handled poorly, they can lead to budget issues, internal pay disparities and employee dissatisfaction. Pay adjustments are based on various factors, including market comparisons, role responsibilities and internal pay alignment.
Employees need to understand why salary adjustments happen and how they fit into the company’s broader pay strategy. Without structured benchmarking, salaries can also drift upwards as pay adjustments happen inconsistently and without real justification, costing the company millions over time. Proper governance ensures salary adjustments are fair, legal and aligned with company strategy.
Reasons for Payroll Adjustment
Salary adjustments are recommended to align the organization’s salaries with market rates. HR departments should conduct and analyze salary surveys, job market reports, and benchmarking data from similar organizations. To ensure your employees can maintain a decent standard of living, it’s essential to offer salaries that match this high cost. An average merit increase is anywhere between 3% to 5% and motivates employees to strive for excellence. Merit increases are awarded to employees for exceptional work, meeting or exceeding goals, and going beyond set expectations. While company culture, leadership, and work-life balance are important, competitive salaries are crucial for retaining employees.
Legal & Compliance Adjustments
Ensure pay equity within teams and across similar roles to prevent discrepancies. Compare salaries with industry standards and competitors, and consider factors such as job role, seniority, location and sector-specific pay trends. Conduct market research to benchmark salaries against competitors.
Simplify CPF, payroll tax Singapore & GST compliance with Omni HR. Singapore Health tech Lucence reduced payroll processing time and grew their headcount with Omni’s automated HRIS. Make sure the pay adjustment begins on the correct pay period.
Document changes
In this case, you may need to adjust an employee’s pay to reflect this new role. In this freshbooks vs nonprofit treasurer 2021 case, you could award a higher increase to those employees facing greater expenses. If your company’s pay rates lag behind those of your competitors, you may experience high employee turnover. Some of the most common reasons for making a pay adjustment include the following. You may decide to adjust an employee’s pay based on factors related to their individual circumstances.
Dallas Fed economists recognized that this December–January jump emerged regularly within the nonbenchmarked part of the data but not in the benchmarked part. As explained in “Seasonally Adjusting Data,” the X12 seasonal adjustment procedure estimates the effects that occur every year in the same magnitude and direction and then removes these recurring seasonal components from the series to reveal the trend and remaining variation. Either way, Hourly software automatically calculates new deductions based on the adjustment, so you don’t have to worry about changing withholdings for taxes and benefits.
Every business handles payroll adjustments differently. Accurate, real-time market data is essential for making informed salary adjustments. While an individual performance review may lead to a merit increase, salary adjustments are typically driven by market conditions, internal equity, or compliance requirements. When employees receive higher pay offers elsewhere, some companies respond with salary adjustments to retain them. Unlike a pay rise, which is usually linked to performance, salary adjustments help make sure you offer fair and competitive compensation for your employees. As an example, you want to make sure that employee payroll adjustments are equitable and are not discriminatory in nature.
You may need to use a one-time negative adjustment to correct an overpayment mistake. Modern payroll software leverages payroll automation to fiscal year wikipedia reduce the need for human intervention in payroll, including the management of payroll changes. When is it necessary to adjust an employee’s pay?
