Resources

Benefits & Compensation

Pay a living wage

The majority of hourly jobs in New Jersey pay less than $20 per hour, making it difficult for many households to make ends meet, even with two workers employed full time. The business case for raising wages is decreased turnover, higher quality workers, improved production and better morale. Here are some tools to help your business develop a plan to increase compensation of low-wage workers:

• Offer good jobs. The Good Jobs Institute makes the business case for good jobs, of which salary is a foundational element. Companies can evaluate their performance as employers, be inspired by “good companies”, and learn strategies to investing in employees and make other transformational company changes. The site is filled with helpful tools and resources, including the Good Jobs Calculator, which allows companies to compare the cost of raising wages against the long-term costs of inaction.
• Consider local costs. When considering how much compensation to offer, use the Living Wage Calculator to estimate the cost of living in your area. Even though New Jersey recently increased the minimum wage, ALICE research shows that it’s still not a livable wage.
  

  Companies leading the way:
  Costco is considered the gold standard of “good companies,” with a starting wage of $15.50 per hour and an average wage of $22.50 per hour in 2019, according to Fox Business News, yearly bonuses that average $4,000, and a culture that’s known to promote and train from within.

Offer affordable health care

Providing affordable coverage may be the most important thing employers can do to support their workers. Yet the rising prices are hard for small businesses and their workers to afford, particularly ALICE. Here are some ways companies are offsetting costs for ALICE:

• Salary-based premiums. For companies with a wide range of salaries, an earnings-based structure—where low-wage earners pay less, and high salaried earners pay higher— is being used increasingly to make insurance available to lower-income earners. According to the Society for Human Resource Managers, while this model creates savings, administrative complexities require careful navigation. Learn more about salary-based premiums here.
  

  Companies leading the way:
  JPMorgan Chase reportedly pays 80 percent of health care premiums for workers making under $60,000, and the company lowered the annual deductible by $750 to $2,000 or less, depending on the plan workers choose.

• High performance network (HPNs). Health plans with high performance networks are more affordable because they offers fewer providers, but ones that are higher quality, maximizing the effectiveness and efficiency of care. There has been a recent upsurge of use in high performance networks:16% of companies offered them in 2020, and still more companies are offering them in 2021. Learn more about the promise of HPNs here.
• Professional employer organizations (PEO). Partnering with a professional employer organization (PEO) enables small businesses to gain access to big business benefits and perks (like more affordable health care plans) and administrative functions (like payroll and taxes). According to one study, companies that work with a PEO grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business. Learn more at NAPEO.
• Secure a nimble broker. If you want the best benefits package for your employees, make sure your benefits and insurance agent is working for you. The Society of Human Resource Management offers best practices for selecting the right broker. Then, don’t operate on autopilot, but bring your budget, priorities, and outside-of-the-box thinking to negotiate the right mix of health care options to match the needs of your staff.

Help employees save for retirement

Building retirement savings is a key issue for ALICE employees. The way most companies structure their retirement plans is often inaccessible for lower salary workers, who cannot afford to contribute the same percentage of their pay as higher tier salary employees. Here are some ideas for helping employees save for their future:

• Automatic enrollment. Join the firms that help their employees’ retirement savings by making 401ks automatic rather than waiting for employees to opt-in and funding the accounts regardless of an employee’s ability to contribute.
  

  Companies leading the way:
  JPMorgan Chase automatically enrolls employees in 401k retirement accounts and contributes 3%-5% of employees’ annual salary each year, in addition to the regular company match.

• ALICE support groups. Giving ALICE workers a voice and a platform to share their struggles can help develop effective solutions. Employee Resource Groups (ERGs) are employee-led support groups for members of a demographic that can facilitate communication with management, increase employee engagement, develop inclusive workplace policies, and build a pipeline for future company leaders. Studies show that companies with ERGs are more profitable than those without. Find out more at What Are Employee Resource Groups (ERGs).
  

  Companies leading the way:
  ERGs at Justworks had been built around fellowship and support, but within the last year they also started working with executive sponsors. Having access to leadership brought an employee perspective to the decision-making table and had a positive impact on employment policies for minority groups throughout the company. For ERG leaders, it has brought leadership experience, influence and exposure, and a boost in compensation.