BLR News

2/8/2005

Unintended Consequences

Old Saybrook, CT – February 8, 2005 – The percentage of employers paying full salaries to their National Guard or Reserve employees on active duty has plummeted in just two years. In 2003, 33% of employers paid exempt employees their full salary while on military leave; this is anticipated to drop to 15% in 2005. Meanwhile, the number of employers who pay nothing to their active duty employees has increased — from 31% in 2003 to an anticipated 50% in 2005. Many companies are still willing to make up the difference between what employees earn during military service and their normal wages (36% in 2003, declining slightly to an estimated 34% in 2005).

Compensation.BLR.com, where compensation professionals go for reliable compensation data, conducted its annual Survey of Employee Benefits in late 2004. The Business & Legal Reports salary data website surveyed more than 3,000 U.S. employers on benefit practices such as military leave and floating holidays.

"The changes in salary payments to active duty reservists and guard members represent a landmark shift," commented Susan Schoenfeld, BLR’s senior compensation editor. "This unintended consequence of extended active duty tours in Iraq and Afghanistan is severely affecting employers – and the nation’s citizen soldiers." Companies obviously feel that they cannot continue their formerly generous policies and have had to cut back. But Schoenfeld points out a consideration that savvy employers seem to be keeping in mind. "As the employment market tightens, retaining these soldiers when they return home will become increasingly important," she said. "Smart employers will improve retention by continuing to pay the difference between their military and civilian salaries."

Floating holidays starting to sink
Only a few years ago it seemed like floating holidays were going to replace company-designated holidays. But BLR’s Employee Benefits Survey found that the percentage of employers not offering floating holidays to their employees increased from 51% in 2003 to an anticipated in 66% in 2005.

Executive summary
Employers may obtain a valuable Executive Summary of BLR’s 2005 Employee Benefits Survey at http://www.blr.com/82008500/WBP1267

Old Saybrook, Conn.-based Business & Legal Reports, Inc. has published plain-English HR and compensation compliance and training materials since 1977. Contact BLR: 800-727-5257 or service@blr.com.

Contact:
Susan Schoenfeld
E-mail
860-510-0100, x2182