The HR Dictionary

Wage Drift

The amount an employee is actually paid at the conclusion of the pay period differs from their basic salary, which is known as wage drift. Additionally, it may be used to describe the discrepancy between an employee's basic salary and their overall remuneration. Unpredictable or uneven demand is typically the root cause of wage drift; as a result, businesses are forced to require overtime work from their staff and may need to pay overtime or bonuses to compensate for their services.

To mitigate the effects of a wage drift a company can employ a wage drift policy. The importance of a wage drift policy for a business can be attributed to its ability to guarantee that workers receive fair compensation for the labor they perform. Additionally, it might aid in avoiding pay disparities that might cause misunderstanding and unhappiness among workers by either underpaying or overpaying them. A wage drift policy can also help to guarantee that the business complies with any applicable wage and hour rules.