How does the salary adjustment work

Wage adjustment is a right of all workers that was created to prevent them from having their purchasing power impaired.

Therefore, the salary adjustment must be made annually and through a percentage of the salary that the person already receives.

Normally, if the professional category in question has a union, the readjustment is established in meetings and collective decisions.

Did you see how this subject is of extreme importance?

Therefore, we have prepared this article so that you have no doubts about this subject and know how to deal with salary adjustments.

Good reading!

How Does the Salary Adjustment Work

Introduction

Are you curious about how salary adjustments work? Whether you’re an employee looking to negotiate a raise or an employer trying to understand the process, understanding how salary adjustments work is crucial. In this article, we will delve into the intricacies of salary adjustments, providing insights and clarity on this important aspect of compensation management.

Understanding Salary Adjustments

What is a Salary Adjustment?

A salary adjustment, also known as a pay raise or salary increase, is a change in an individual’s salary, usually implemented to account for various factors such as performance, market conditions, or cost of living. It is an essential tool for employers to attract and retain talented employees.

How are Salary Adjustments Determined?

Determining the appropriate salary adjustments involves a careful analysis of several factors. Employers typically consider the following:

  1. Performance: Performance evaluations play a significant role in determining salary adjustments. High-performing employees are often rewarded with larger salary increases, while underperforming employees may receive smaller adjustments or none at all.
  2. Market Conditions: Employers also consider the market value of specific roles when determining salary adjustments. If the demand for certain skills is high, employers may offer more significant increases to retain top talent and remain competitive in the market.
  3. Cost of Living: Inflation and changes in the cost of living are crucial factors in determining salary adjustments. Employers may adjust salaries to ensure that employees’ purchasing power remains consistent and to provide fair compensation based on prevailing economic conditions.

Types of Salary Adjustments

Salary adjustments can take various forms, depending on the organization’s policies and practices. These may include:

  1. Merit Increases: Merit increases are based on an employee’s performance evaluation. Employers award higher raises to exceptional performers and smaller raises to those meeting expectations.
  2. Promotion Increases: When employees are promoted to higher positions, they often receive a significant salary adjustment to reflect their increased responsibilities and contributions to the organization.
  3. Cost-of-Living Adjustments: Cost-of-living adjustments, commonly known as COLAs, are periodic increases in salaries to account for inflation and changes in the cost of living. These adjustments help employees maintain their standard of living over time.

The Salary Adjustment Process

Now that we understand the basics of salary adjustments, let’s take a closer look at the typical process involved:

  1. Evaluation Period: Employers usually conduct regular performance evaluations to assess employee contributions and effectiveness. These evaluations serve as a basis for determining the need for salary adjustments.
  2. Budget Allocation: Once performance evaluations are complete, employers allocate a budget for salary adjustments. This budgetary allocation depends on various factors, such as the organization’s financial health and business objectives.
  3. Determining Individual Adjustments: Employers consider performance evaluations, market conditions, and other relevant factors to determine individual salary adjustments. This involves careful deliberation and assessment of each employee’s contribution and overall worth to the organization.
  4. Communication and Implementation: Once salary adjustments are finalized, employers communicate the changes to employees. This may involve one-on-one discussions, written notifications, or other appropriate means. Employers then update payroll systems accordingly to ensure accurate remuneration.
  5. Monitoring and Review: Employers should regularly monitor the impact of salary adjustments and assess their effectiveness in achieving desired outcomes. Adjustments may be reviewed periodically to ensure continued alignment with organizational goals and market conditions.

Conclusion

Salary adjustments are a vital part of an organization’s compensation management strategy. By understanding how they work, both employers and employees can navigate this process more effectively. Employers can attract and retain top talent, while employees can advocate for fair compensation based on their contributions. Remember, salary adjustments are not solely based on individual performance, but also take into account market conditions and cost of living. With this knowledge, you can approach salary negotiations and discussions with confidence and clarity.

How does the salary adjustment work?

Normally, the salary adjustment takes place annually and is stipulated in the month of May.

However, the company must consult the month defined with the union of each category.

It is important to highlight that the readjustment percentage is only ratified through an agreement after a discussion between your union, employees and the company itself.

In addition, there are situations in which the company itself can readjust wages before negotiations, spontaneously.

If this occurs, the amount may be deducted from the readjustments defined in the bargaining agreement. This means that if the set percentage is higher than anticipated, professionals should be paid the difference.

Annual salary adjustment law

The annual wage adjustment is a right of every worker, which the CLT itself guarantees and which obliges companies and professional unions to sign an agreement in favor of employees.

The readjustment is mandatory in article 611 of the CLT, which says:

“Art. 611 – Collective Bargaining Agreement is the normative agreement by which two or more Trade Unions representing economic and professional categories stipulate applicable working conditions, within the scope of their respective representations, to individual labor relations.” (Wording provided by Decree-Law No. 229, of 2.28.1967).

Article 10 also sets out the obligations of the law and its determination in relation to salary readjustment.

“Art. 10. Salaries and other conditions related to work continue to be fixed and revised, on the respective annual base date, through free collective bargaining.”

Who is entitled to salary adjustment?

All people hired by the CLT  are entitled to salary adjustment on the payroll.

In addition, it is important to highlight that employees who are serving notice are also entitled to the readjustment.

In addition, employees who were hired before or during the convention period will receive the readjustment retroactively for the days worked in the previous months.

What is the payroll readjustment anyway?

The salary readjustment is an increase made taking into account inflation and other economic factors that must be carried out every year.

The objective of the payroll readjustment is to preserve the purchasing power of all workers with a formal contract.

This way, employees get a salary that is more suited to today’s economic factors, and, as this readjustment is an obligation, companies must be prepared.

For this reason, the base date was created, which is the period in which all companies, regardless of their category, must meet and discuss the terms of collective bargaining agreements and salary revisions.

The base date always happens on the first of the month scheduled in the agreement, and may vary according to category or union.

To define the readjustment, a process involving unions , companies and workers is carried out.

And it is only after this negotiation that the amount of the increase is reached and, thus, the adjustment is ratified.

Does the adjustment only include salary correction?

No.

This is because the collective bargaining agreement that provides for the readjustment can include other points in the employment contracts.

For example, it can include: overtime and increase in the value of benefits (food), decrease in the percentage of discount on transportation vouchers, among other benefits.

Meaning of database

The base date refers to the month of the year in which the salary adjustment and negotiations with the unions that represent the categories take place.

This way, the dates will vary according to the categories, with no fixed period.

That’s why it’s important that HR knows the dates so that the readjustments are paid correctly.

There are two models:

  • Proportional salary adjustment: What happens when the employee joins the company’s staff after the base date.
  • Retroactive readjustment: Occurs proportionally on the salary with application of the percentage of the period between the base date and the collective agreement.

The base date is always the 1st of the month in which the salary adjustment will take effect, for this reason HR must always be attentive to new hires, since they are also entitled to new salaries.

What is the deadline for salary adjustment?

First of all,  we need to inform you that there is no official date for the salary adjustment, what exists is a date for the adjustment of the national minimum wage, which is usually announced by the Federal Government until the second half of January.

Thus, the period for readjusting the worker’s salary will depend on the agreement entered into between the professional category union, the employees and the company.

Thus, only after the agreement between both parties has been ratified will it be possible to determine a date to stop applying the salary adjustment.

However, it is important to take into account that the agreements usually take place in the first months of the year, after the announcement of the readjustment of the national minimum wage, starting in January and usually defined until June.

It is also important to point out that what defines the wage readjustment of workers does not only concern wages.

This is because the agreements may vary other points such as the increase in the meal/food allowance. The value is deducted from the transportation voucher and overtime.

Salary adjustment: How to calculate?

As adjustments are made every year, it is recommended that the company carry out annual planning, and try to predict a readjustment percentage, so as not to have any kind of surprise with the impact on the payroll .

So that the company can get an idea about the value of the readjustment, it can be based on adjustments from previous years. However, calculating the cost of this salary change is very simple.

See how the payroll salary adjustment works:

Just take into account the employee’s last salary and apply the adjustment percentage collectively defined to him.

Thus, if the salary increase is 3.5%, for example, employees who received R$ 1,500.00 in the previous month will earn R$ 1,552.50 (1,500 + 3.5%).

How to organize your company for the salary adjustment?

For all types of businesses, this period always requires greater attention, since, as the salary adjustment in the payroll is mandatory, it will directly impact the organization’s budget.

For this reason, it is necessary for the company to carry out a prior annual planning, predicting its percentages.

This is because being prepared is essential to carry out the readjustment effectively.

For this, the company needs to know how to carry out the process and still take some care with its budget.

Therefore, here are some important tips for managing salary adjustments within your company:

keep up to date

The company must always walk side by side with the unions that will regulate the professional category of its employees.

In this way, she can follow the progress of the collective bargaining agreement and always be up to date on the wage adjustment amounts on the payroll.

For this reason, always have a good relationship with the unions, as well as seeking help from legal professionals so that the process is carried out legally.

In this way, the company is free from labor lawsuits .

Prepare and organize payroll

The salary adjustment must be granted to all employees who are entitled to it and according to their respective categories.

For this reason, it is essential to include it in the payroll .

For this, prepare and organize your payroll well, and, during your company’s annual planning, try to predict the percentage of readjustments, so as not to suffer from any major impact on the budget.

Guide the entire HR team to clarify doubts about the readjustment

HR professionals need to be prepared for salary adjustments on the payroll.

They need to be instructed to be able to clarify possible doubts from other employees.

Communicate to employees

Your company needs to always maintain efficient communication with its employees, as this is essential for a good organizational climate .

Therefore, it is important that your company always informs employees about the progress of the collective agreement and the predictions for homologation.

And, as soon as the managers know about the readjustment percentage and the payment date, it is important that they pass it on to the team.

Communication can be done through internal bulletins, notices, bulletin boards, e-mails, among other options.

How does salary adjustment happen in cases of dismissal?

There is no legal impediment to the employee being dismissed on the eve of the base date.

However, if he is dismissed, without just cause, within 30 days prior to the base date, including the prior notice period , he will be entitled to receive compensation corresponding to the amount of his salary.

Now, if the dismissal occurred for just cause or by resignation, this will not happen.

Another situation that can happen is the worker being dismissed between the base date and the date of the actual granting of the salary adjustment.

This happens if there is a certain impasse in collective bargaining that causes the convention or collective agreement to be entered into after the base date.

In this case, even if the negotiation is concluded weeks or months after the base date, the salary adjustment applies retroactively.

Thus, if the worker was dismissed between the base date and the conclusion of the agreement or convention, as soon as the salary adjustment is defined by the collective norm, the former employee will be entitled to a complement of the sums received, based on the new value wage. The same applies if the employee resigned or was dismissed for cause.

Difference between bargaining agreement x salary adjustment

The salary increase , on several occasions, is used as a synonym for salary adjustment, however, collective bargaining and salary adjustment have totally different concepts.

When it comes to employment issues, a dispute means that there is a conflict to be resolved, usually by legal means. This conflict can be individual or collective.

There are many situations that may be behind these conflicts, such as sickness benefits , transportation vouchers, food, etc. They are determined by collective agreement or convention.

The term is very confused with salary readjustment, because most of the time the differences involve this readjustment.

In this case, when there is no agreement between employer and employee regarding the readjustment percentage, there is talk of wage bargaining.

This wage agreement is the increase in workers’ wages, at each base date (year or biennium), as determined in collective agreements and collective agreements, for each category.

Difference of salary adjustment x salary increase

As previously mentioned, the salary adjustment aims to guarantee the purchasing power of employees, which may end up being harmed due to inflation.

This is even provided for in Article 7 , item IV of the Federal Constitution.

The salary increase has the objective of increasing purchasing power, that is, while the readjustment serves to align the salary return with market standards, the increase is used so that the salary is above them.

Furthermore, unlike the readjustment , the increase is offered through the employer’s own initiative, which can be done through its job and salary plan, through promotions or other issues related to the appreciation of professional performance.

Also, whenever there is an increase, the salary change must incur a change in the employment contract, informed through eSocial in event S-2206.

Note that the readjustment is valid for all workers, while the real increase is only for professionals who are in a specific situation, such as a promotion.

Importance of Corporate Health for your company

Corporate health is so important that it goes beyond simply offering corporate medical insurance.

It actually contributes to the well-being of employees.

So much so that, nowadays, corporate health is a strategy that encompasses several actions of a company that aims to promote well-being.

Therefore, disseminating good health practices and knowledge is so necessary to make employees aware of the importance of becoming protagonists in caring for their health and quality of life .

In general, quality of life is a concept that encompasses physical, mental, spiritual, psychological and emotional well-being.

For this reason, it is up to HR leaders to recognize the fundamental role that corporate health plays in caring for, welcoming and engaging employees, preventing risks of damage to health and balancing the work environment.

Get to know Conexa Corporate

Well, now that we have informed you about the most important points about the HR factor and the importance of knowing it during pregnancy, the time has come for you to understand what Conexa Corporate offers that is different for you.

  • Teleorientation

Due to the new coronavirus pandemic, Conexa Corporate began to realize that  telemedicine can be used in everyday life, especially in less complex issues.

  • Health Related Telepsychology

Conexa Saúde also offers psychological follow-up to its company’s employees who have illnesses such as Burnout , depression , anxiety , among others.

  • Conexa in Company

Conexa in Company consists of monitoring employees’ health issues internally.

Below we list some of its functions:

  • Loss ratio monitoring;
  • Health 24 hours a day, 7 days a week;
  • Emotional support for internal teams.

Thus, crisis situations can be easily circumvented.

  • Platform

The Conexa Platform is a great differential that Conexa Saúde has, and this makes it way ahead of traditional health plans .

This happens because it has an exclusive platform , which facilitates the entire connection process between doctor and patient, and that in itself is already a great positive point.

Some of its day-to-day functions are:

  • Storage of medical documents in digital format;
  • Integration of patient data in their profile, facilitating multidisciplinary diagnostic processes;
  • Ease of access to test results and the patient’s history, which can open up, from the outset, the possibilities of diagnosis;
  • Allows the professional to analyze which tests the patient has already done and check the results, without having to request procedures that have already been performed recently;
  • Allows the issuance of reports at a distance and interpretation of exams with a medical team — this is very common in complex cases, such as treatment of malignant tumors, in which professionals exchange information with other specialists, in order to outline the best path for their patients during the procedure. process.

In addition, all the security protocols present on the platform guarantee the privacy of patient data, mainly due to the fact that it respects the provisions of the LGPD for these cases.

This is fundamental, mainly because it involves sensitive data.

In addition, through telemedicine, Conexa Corporate offers its employees remote consultations with 24-hour availability, every day of the week, managing to align with the professionals’ agenda

Conclusion

The HR department must pay close attention to salary adjustments.

Because, more than an employee’s right, such a change in the payroll will impact the company’s finances.

Thus, HR professionals must always have an annual plan to be able to measure the value of such readjustment.

And, even if there is no exact date for such changes, the calculation can be predicted taking into account previous years.

In this way, it is possible to stipulate such an increase so that there are no surprises when the new values ​​come into force definitively.

Did you like the content? Got any questions? Leave your comment so we can help you get ready! Thus, the salary adjustment will not be a headache in your company’s strategic planning.

 

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