HR Glossary

Wage drift

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Wage drift definition

Wage drift refers to a difference between the salary negotiated by a company and the one that is actually paid to an employee by the end of the work period, be it monthly or weekly.

what-is-wage-drift

Wage drift definition

Wage drift refers to a difference between the salary negotiated by a company and the one that is actually paid to an employee by the end of the work period, be it monthly or weekly.

Wage drift usually occurs when a company has the unpredicted demand and needs its workers to put in extra work hours. The workers, naturally, receive overtime compensation for this and accumulate a difference over their based negotiated salary over a period of time.

This phenomenon mostly occurs in areas or industries where demand is highly unpredictable on a short-term basis, like tourism or high-growth economies.

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