6 Big Compensation Articles in 2018

 

Stephen Miller, CEBS By Stephen Miller, CEBS December 13, 2018
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Dealing with a tighter labor market while trying to keep pay budgets in check was a common challenge for our readers in 2018, as was dealing with pay-equity issues. Responding to the tax overhaul passed at the end of 2017 was another hot topic, as reflected in these highly read articles from SHRM Online.

1. IRS Issues New Withholding Tables for 2018
and 2. IRS Issues New Form W-4 and Updates Tax Withholding Calculator

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Near the start of the year, the IRS updated income-tax withholding tables for 2018 to reflect changes made by the Tax Cuts and Jobs Act, which was enacted at the close of 2017. The IRS also issued a new Form W-4 and updated its online withholding calculator to reflect 2018's revised income brackets and tax rates. The IRS asked HR and payroll departments to alert employees to check their tax withholding and to submit a new W-4 if they wanted to make changes—advice that's again pertinent as employees look forward to 2019.

3. 2019 Salary Budgets Inch Upward Ever So Slightly

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Around midyear, U.S. salary budgets for 2019 were expected to rise by an average of 3.2 percent, up fractionally from an actual year-over-year increase of 3.1 percent for 2018, according to several salary forecasts. While salary-budget increases represent additional funds that employers plan to spend on employee pay, they don't necessarily represent the average salary increase that workers will receive. Higher raises are likely to go to top performers and those with in-demand skills.

4. Where's the Wage Growth?

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The wage gains that economists expect in a tight labor market hadn't emerged through most of 2018, pay data showed, and there was no shortage of reasons as to why not: low productivity growth, automation, globalization, the decline of unions, retiring Baby Boomers and ever-higher health care costs.

5. Companies Boost Starting Salaries, But Getting a Raise Is Hard

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Toward the close of the year, more corporate leaders came to realize that low unemployment meant they needed to raise their salary offers to attract new hires. But meager raises left many current employees feeling they'd been left behind, causing disengagement and higher turnover.

[SHRM members-only how-to guide: How to Establish Salary Ranges]

6. Close the Gender Pay Gap with Career Parity

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Women in the U.S. earn 17.6 percent less than men on average, but that gap virtually disappears when analyzing men and women who work at the same level at the same company and perform the same function, according to new research findings. Men still move into more-senior positions at significantly higher rates, however, underscoring an "opportunity gap" that employers need to address.


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