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Wage Drift

Meaning & Definition

Wage Drift

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 un-predicted 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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