Compensating Employees
• One-third (33%) of small employers pay a majority of their full-time employees hourly. They less frequently pay a majority by salary, and least frequently do so with commissions including tips. Hourly wage is the dominant form of payment for part-time employees.
• Seven (7) percent reported at least one full-time employee, including tipped employees, working at the minimum wage or below.
• Fifty-two (52) percent said that they paid employees periodic bonuses or profit-sharing based on the performance of the business.
• Two-thirds of small employers ask their employees to work overtime. The most frequent way they determine who (and who not) to pay overtime is to follow industry practice (29%); make all hourly employees eligible (29%); make everyone who works overtime eligible (17%); make everyone except management employees eligible (12%); and classify employees by earnings and occupation into eligible and ineligible for purposes of overtime pay (9%).
• The most common employee benefit small-business owners offer (excepting flexible work arrangements) is paid vacations. Three of four (75%) who employ at least one fulltime person with a minimum of one year of service offer paid vacations to a majority or more of their full-time employees. Sixty-one (61) percent sponsor an employee health insurance plan; 59 percent give paid sick leave; 41 percent disability insurance; 39 percent job-related education reimbursement; 30 percent a pension plan; 29 percent life insurance; and 24 percent provide dental insurance to a majority of their full-time employees with at least one year of service.
• Owners of firms with 20 or more employees are substantially more likely (usually in the range of 20 percentage points) to offer any of the benefits listed above than are those employing fewer than 10. The percent of full-time employees covered is much greater than the percent of employers offering.
• Fifty-four (54) percent provide discounted or free goods or services from the business with about 30 percent saying those goods or services are worth over $1,000. Offering flexible hours to handle personal situations is almost universal.
• If small-business owners wanted to give their employees the equivalent of a $1.00 per hour compensation increase, 73 percent said they would give it in the form of higher wages or salaries. The second most cited choice is paid time off (5%) followed by health insurance benefits (5%).
• Eighty-two (82) percent of small employers believed that employees would prefer a compensation increase equivalent to $1.00 per hour in added wages or salaries. Six (6) percent believed that they would prefer it in some benefit not listed, such as paid parking. Four (4) percent each identified paid time off and health insurance benefits as the benefit employees would most like to have increased (or instituted). Four of five would offer what they believe employees most want.
• Small employers do not consciously target their benefit package to any portion of their labor forces. Almost seven of 10 (69%) indicated that they focus the type and size of benefits provided to all full-time or all full-time and part-time employees. Eight (8) percent target the ownership, another 8 percent the firm’s most valuable employees, and 5 percent the longest serving.
