Compensation Policies

Compensations define the different types of pay that a worker has earned or is owed in a pay period.

At Salsa, we refer to the different types of pay as "worker compensations", but others may refer to these by different names such as "pay types", "wage items", or "earning types".

It is not uncommon for an employee to have multiple different compensations within a single pay period. Some common examples of pay types include hourly, salaried, commissions, tips, and bonuses.

Worker compensations will always reference a compensation policy, which in turn governs the details of taxation that is collectable by agencies from the worker and employer. Compensation policies can be set at the organization, employer, or worker level.

Organization compensation policy

Salsa allows you to easily create default compensation policies for your organization that will be made available to all of your employers. During account setup, organization compensation policies can be configured for all employers using specified amount strategies. Once default organization compensation policies are configured, all employers have access. This removes the need to set specific employer compensation policies for each employer individually.

There is also no limit to how many, or when organization compensation policies can be added. This makes managing organization compensation policies for a large number of employers incredibly quick and easy. For example, if one day support for a new organization compensation policy is needed, a new policy can be added with just a few clicks, and all employers will automatically receive it.

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Example

A organization has two employers: Employer A and Employer B. Employer A requires commissions and hourly rate based pay compensation policies for hourly employees. Employer B requires a fixed amount compensation policy for salaried employees.

The organization can add a organization compensation policy with a percentage amount strategy and call it "Commissions", a organization compensation policy with a rate based amount strategy and call it "Hourly Pay", and a organization compensation policy with a fixed amount strategy and call it "Salaried Pay".

Once added, all employers can use some or all of these organization compensation policies as needed.

Employer compensation policy

As described in the example above, employers can have unique needs around employer compensation policies. Outside of default organization compensation policies created at the organization level, employers can also create employer compensation policies at the employer level. This includes customizing one of the default organization compensation policies or adding an entirely new employer compensation policy.

Employer compensation policies at the employer level are available for all workers.

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Example

Employer A has selected and been using both the default "Commissions" and "Hourly Pay" organization compensation policies to pay employees. Employee retention has been tough, and Employer A's owner wants to implement a recurring monthly $250 bonus for all workers. Employer A can add an employer compensation policy with a fixed amount strategy and call it "Bonuses".

Once added, this employer compensation policy will be available to Employer A only.

Worker compensation policy

Compensation needs can vary at the worker level as well. It is not uncommon for workers at the same employer to be paid differently. Worker compensation policies can be configured at the worker level and applied to select workers only.

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Example

An employer's workers are paid hourly, but they have one worker who is paid a recurring bonus of $50. The employer can set up a "Bonus" worker compensation policy to use for this single bonus paid worker.