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We’ve compiled a list of the 100 most commonly asked questions we have received on the federal Fair Labor Standards Act (FLSA) overtime regulations.
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This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

At the end of the report, you will find a list of state resources on wage and hour issues. This report includes practical advice on topics such as:
  • FLSA Coverage: How FLSA regulations apply to all employers and any specific exemptions from the overtime requirements
  • Salary Level: Qualifying for exemptions and nonexempt employees
  • Deductions from Pay: Deducting for violations, disciplinary reasons, sick leave, or personal leave

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April 08, 2008
The Art and Science of Paying Unique Jobs and Critical Skills
Compensation professionals, if you had to describe in one sentence what exactly what you do all day, it might go something like this: for every job, determine the duties, skills and responsibilities it requires, and decide how much that set of criteria is worth in the current job market.

For some jobs, it just might be that simple. With an abundance of salary surveys available from a number of sources ­(including BLR, of course) ­ it is very likely that you can find pricing information for the job you're evaluating, in your area, at any given time. The process comes down to three simple steps: choose a salary survey, locate the job, price it at the 50th percentile. Once again, science prevails.

However, there are always a few jobs, perhaps those in high demand in your area, or those requiring a unique set of skills, for which you'll need to inject a bit of art into the process. For these positions, you'll have to color outside the lines a bit, says Nancy Irwin, a compensation consultant with Henkel (, a consumer and industrial marketing company.

Irwin is set to lead a fall workshop for WorldatWork ( where she will share information on pricing these unique or high-demand jobs. The idea is not to decide for you which jobs should be priced differently. Rather, once that determination is made, the workshop will teach participants some of the best ways to make informed decisions about how to price them in today's market. Irwin agreed to provide us with a sneak peek at a few of the workshop's best ideas.

Problem: You need to price a unique job, and nothing comparable is listed on salary surveys.

Often, companies create a unique job by hybridizing two or more common jobs that can be found on standard salary surveys. This is a common situation in small companies where employees wear many hats, but large companies can find themselves in this position, too. "Sometimes you'll find that functions may be combined a little bit differently than what is considered typical," Irwin says. "That's fine. It's just that it poses a little bit of a challenge for the compensation professional to price out the job. Sometimes you'll find that you have a job that might be considered weightier in the marketplace, or perhaps it has a component to it that isn't addressed elsewhere in the marketplace ­ some duties that are truly unique to the company."

Solution: Depending on the specifics of the situation, the compensation professional can choose two or more benchmark jobs and combine them, weighting them depending on the particular responsibilities and skills involved. At times, however, you may have a job for which you can benchmark only a portion of the job.

"Let's say you have a risk manager, which is a standard benchmark job. But that person also does something unique to for the corporation, perhaps functioning in a process improvement role," says Irwin. "You're not going to find a job like that on the typical salary survey. So to compensate for those presumably heavier duties, you'd want to increase the benchmark data by adding a premium. Or, you can do that in reverse; if you have a job that is responsible for all of your risk management programs except for one significant piece, you could roll back the benchmark data by an appropriate amount."

Problem: Due to intense competition for talent, you're having trouble attracting or keeping (or both) employees in a job that is essential to your company.

"Say you're having difficulty hiring nurses--nurses are in very high demand ­ how do you price those jobs?" queries Irwin. "The competition for them is very high, and it is one of the most critical jobs in the health care setting."

Solution:Asking yourself a series of questions can help you determine your recruitment area and how aggressive you'll need to be in securing talent, Irwin says. "When you go out to recruit, do you have to look nationally, or can you focus locally? Do your competitors need this critical skill? Is the need industry-specific? Does everyone in the industry have a need for this critical skill set, or is this critical skill set unique to my company? Those are the kinds of things you have to look at when you determine what your market is. Once you determine your market, then you figure out which salary surveys you want to use."

And make no mistake: choosing the correct salary survey is an art. "The choice depends on what kind of a situation you're addressing, and what your recruitment area is," says Irwin. "There are a number of things defining what the market is for each job. How you define the market will help you determine which surveys to use to get your data."

Two components: base pay and variable pay

Total compensation for hard-to-fill jobs will likely consist of base and variable pay, Irwin says. Commonly, companies use a lead/lag strategy for base pay. "At the beginning of the salary review year, you determine how fast you think the market will move for a particular job," Irwin explains. "If it's 4% for the year, you would increase salaries by 2%. At that point, you're leading the market. As you travel through the year, in June [assuming a calendar-year schedule] your salaries for that job and the external markets should be very similar. Then for the remainder of the year, you're lagging the market somewhat because the market continues to increase, but your salaries are going to remain the same."

However, for critical jobs Irwin recommends that you consider adopting a lead posture instead. "If you anticipate that the market will move 4 percent, you make that immediate adjustment to salaries of 4 percent, so you're leading the market for basically the entire year. Then, at the end of the year, the actual rates you're paying and the external market should be essentially the same, if you projected the market movement accurately."

Another suggestion Irwin offers is to alter the frequency of salary reviews. "Typically, companies look at pay raises annually," she says. "If you have a critical position that's in very high demand, you might want to review salaries for that position perhaps every 6 months. Not that you're necessarily going to adjust the pay every 6 months, but at least review it to see if you need to."

Variable pay is becoming main stream, and certain positions will virtually require it. "A lot of companies have variable pay now," Irwin says. "Critical or unique jobs are probably incorporated into your variable pay program, but you might want to establish targets and maximum opportunities that are maybe a little bit more aggressive for them. Increase the percentage payouts that the people in those jobs could achieve. Or, depending on the position, you might need to establish a specific program for those jobs."

While life becomes more and more automated, there will always be some things that require a hands-on approach. Determining pay for unique and critical jobs is one of those. Irwin advises that these receive your special handling. "Look at your base pay, your variable pay, and any special programs you offer. Use all of these different programs to craft a strategic response to your situation." That's where the art and the science meet.

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