Wage drift

Updated May 3, 20244 min read

What is Wage drift?

Sometimes (maybe even most times), employees get paid more than the agreed-upon sum in their contracts. The difference between what the company pays them and what the company initially agreed to pay them is wage drift.

What is Wage drift

What causes Wage Drift?

  1. Overtime: As pointed out in the example above, overtime is among the most popular contributors to wage drifts. Employees who log overtime are paid more than their standard wage for the extra time.
  2. Bonuses: Companies and organizations employ bonuses as a form of incentive to stimulate better performance in employees. Meeting the required goals activates bonuses and contributes to wage drift.
  3. Additional responsibility: For whatever reason, a company can find itself in a position where it requires some employees to step up and take on more responsibility. In such situations, extra compensation befitting the added responsibility is added to the pay package of the individual at the end of the work employee(s) period.
Abhishek Kathpal

Abhishek Kathpal

Abhi is the co-founder of Longlist.io, enabling 50+ recruitment businesses build better client and candidate relationships.