Global Compensation

Global compensation pertains to the planning and administration of pay programs for domestic and expatriate employees located in company offices around the world. It’s important to understand the culture, competitive practices, and employment laws of each country where the organization operates in order to avoid costly mistakes.

Sales compensation Sales compensation applies to pay programs for sales employees and managers. Sales compensation is distinct from non-sales variable pay plans in that the sales compensation plan ideally supports the overall marketing and sales plan for the company directly. As a result, the sales force has a direct and measurable impact on the company’s overall sales/revenue. Because of this link, a larger percentage of a sales person’s total cash compensation is typically put “at risk”.

Legal & Regulatory Issues Minimum Wage is defined as the smallest hourly wage that an employee may be paid for all hours worked, as mandated by federal or state law. Overtime pay is the term used to define compensation for work in excess of 40 hours per week (a defined, seven consecutive day period) in accordance with the Fair Labor Standards Act (FLSA).

FLSA categorizes workers in the United States into two groups:

-those that are eligible for overtime pay and those who are exempt from the requirement to pay overtime.

Non-exempt employees are typically paid an hourly rate for regular hours and an hourly rate plus a premium for time worked beyond the regular schedule. Exempt employees are paid a salary for their contribution to the organization without any extra pay for extra hours. The child labor provisions of the FLSA are designed to protect the educational opportunities of youths and to prohibit youth employment in jobs and under conditions detrimental to their health and well-being.

The Act prohibits sex-based wage discrimination. That is, men and women in the same establishment, who are performing work which requires equal skill, effort and responsibility and are performing under similar working conditions, may not be paid differently based on gender. Employers who violate the Act may not reduce the wage rate of any employee to comply with the Act.

The U.S Department of Labor has published extensive resources to help employers with various wage and hour matters. For help with: Identifying which workers are employees covered by the FLSA,

Determining which hours spent in work-related activities are considered FLSA “hours worked” and must be paid, Determining which employees are exempt from the FLSA minimum wage and overtime pay requirements under the Part 541 overtime regulations,

Careers in Compensation Although the responsibilities related to compensation are often performed by a human resource manager or generalist in small companies, larger companies often have a compensation department within Human Resources. Compensation is staffed with one or more compensation analysts (also called specialists or consultants). Specialized certifications may be needed to move into career or senior levels of the profession.

Francis I. Jeyaraj

Specialist - Compensation & Benefits