Salary Compression

TheAls

Hi Martin 
Your advice on the following would be gratefully received.
Due to NMW increases over the past few years I have seen my salary compressed in real terms by around 20%. Although more of an ethical issue than a legal one but based on the pay gap between skilled/unskilled, manager/direct reports and roles carrying responsibilities compared to those with none becoming so much smaller. To where it is almost zero. I am beginning to question whether the responsibility of a senior role is worth the hassle. Having raised the issue with my employer to no avail ( As they are not obliged to provide pay raises above NMW). Has anyone experienced this before? How was it resolved? Is this something an Industrial Tribunal would consider? Where resigning is not an option. Is there any advice to get my employer to address this unfair inequality between government led unskilled minimum wage increases and the lack of increase in salaries for skilled and higher responsibility employees (which employers are not obliged to offer the same percentage increases to) who are not protected by the NMW guidelines and would also fall outside the Equality and diversity act as this type of discrimination does not fall within one of the seven protected status'?

Regards

Gavin83

TheAls said:

Hi Martin 
Your advice on the following would be gratefully received.
Due to NMW increases over the past few years I have seen my salary compressed in real terms by around 20%. Although more of an ethical issue than a legal one but based on the pay gap between skilled/unskilled, manager/direct reports and roles carrying responsibilities compared to those with none becoming so much smaller. To where it is almost zero. I am beginning to question whether the responsibility of a senior role is worth the hassle. Having raised the issue with my employer to no avail ( As they are not obliged to provide pay raises above NMW). Has anyone experienced this before? How was it resolved? Is this something an Industrial Tribunal would consider? Where resigning is not an option. Is there any advice to get my employer to address this unfair inequality between government led unskilled minimum wage increases and the lack of increase in salaries for skilled and higher responsibility employees (which employers are not obliged to offer the same percentage increases to) who are not protected by the NMW guidelines and would also fall outside the Equality and diversity act as this type of discrimination does not fall within one of the seven protected status'?

Regards

No, you can’t take your employer to a tribunal because they won’t give you a pay rise. As you point out several times in your post above minimum wage an employer is rarely obliged to provide annual increases unless it’s contractually obligated in some way.

Yes higher salaries have been reduced in real terms but that was always one of the disadvantages of the minimum wage. Not really much you can do about this, except campaign to have the minimum wage removed.

Savvy_Sue

Resigning is ALWAYS an option - it may not be a palatable option but you are free to find an employer paying better rates to senior staff. 

Sorry, I know that's not what you want to hear. 

Another option is to join and become involved in a trade union, perhaps together you can negotiate for better rates for increased responsibility. 

Marcon

Feeling disgruntled is understandable, but it's a case of voting with your feet. Resigning is an option - but not a good one, especially at present, unless you are very confident indeed that you have another job to go to which offers a better deal and a reasonable chance of security. If that's not the case, then you have to put up with where you stand at present. I'm afraid it's as simple as that. 

Diamandis

If your job was worth a lot more than what you are paid then resigning would be the best option. If you cant secure another job with more money what would make you think that your current employer should pay more?

TELLIT01

There is no obligation for an employer to pay anybody more than the minimum wage, nor is there any requirement to maintain pay differentials.  Failure to do so can certainly have a demotivating and demoralising effect on staff but that's a different matter.

Raise it with your manager and if you don't like the result you have the option of sucking it up or looking for another job.

moneysavinghero

You are getting paid the market rate. If it was not the market rate then you could resign and get a job with someone who was willing to pay market rate for your job.

There is nothing to stop a company paying their chief executive minimum wage if they wanted. But if they did all the best chief execs would go to another company that was willing to pay a better salary. It's not a fairness issue, its a market forces issue.

Sandtree

If you want better pay you switch companies
If you want promotion you stay with a company

Not only is it perfectly fine for them to narrow the pay gap between different grades of staff its also often possible, though not desirable, that an employee is paid more than their manager. I've had direct reports on more money than me and naturally those on commissions its even more common.

TELLIT01

During the financial services problems and the ensuing recession in the early 2000's many in the Civil Service got no pay rise at all for about 5 years.  These weren't people on mega money.