If you’ve ever asked yourself, “Am I being underpaid?” then know that you’re not alone. Forty-three percent of U.S. workers believe they’re not being paid appropriately. When you have student loan payments to make and financial goals to reach, believing you’re overworked and underpaid can be pretty disheartening.
Deciding how to deal with being underpaid will differ depending on your situation. To help you determine whether you’re really not making what you should be, we’ve compiled a list of signs that you’re being underpaid (and overworked perhaps), along with tips on how to deal with it.
Sites like Indeed, LinkedIn, PayScale and Salary.com have job salary listings and salary comparison tools you can use to research and compare salaries in your field. The U.S. Bureau of Labor and Statistics website also posts wage data for over 800 occupations organized by state and metro area. If you’re interested in a career change, you can sort the occupations by median wage to search for well-paid jobs and underpaid jobs.
Offline, you can ask peers in the same field what their salary is to see if you are being paid fairly. If peers are tight-lipped about their earnings, consider answering calls from recruiters to find out the salary they’re offering. “Keep in mind they’re probably telling you the best case scenario just to get you excited [to move companies], but it’ll still give you a clue as to what the market is saying out there,” said Rita Friedman, a Philadelphia-based job search and career coach.
“Am I being paid enough for my job?” is a question we all ask ourselves at one point or another in our careers. Remember that salary is just one cog in the wheel that makes up your total compensation package. Besides your take-home pay, total compensation includes employer retirement matches, health care benefits, professional development opportunities and other office perks, according to Friedman. If you have a job with decent benefits, low stress and great coworkers, consider whether these perks are worth sacrificing a few extra thousand dollars per year.
Since determining whether you’re being underpaid isn’t always easy, here are a few signs you’re not valued at work:
- Coworkers are getting paid more: Pretty clear-cut here—You learn from peers that they’re making more than you for close to the same amount of work.
- Raises are negligible or nonexistent: You’ve been with a company for a while and you’ve only seen cost of living salary increases of 1 to 2% and not much more.
- New responsibilities are routinely put on your shoulders: Your tasks and duties have increased since taking the job, but your salary has not. You’re asked to take on extra work without extra compensation.
- The office looks to you as the expert: When people have questions about policies and procedures, they turn to you. Sadly, your salary hasn’t increased much with seniority.
- The company is profiting handsomely from your work: You see the company is making a direct ROI from relationships you have, deals you close and experience you bring to the table. However, you’re not seeing any compensation for the value you offer.
- You are in a constant state of limbo: Your review keeps getting put off so you’re unable to have a conversation about your salary. You may be told there’s a freeze on raises or bonuses, and the freeze seems never-ending.
- Your employer is encouraging you to “work off the clock”: You’re paid hourly and your boss asks you to work before “clocking in” or after “clocking out” to minimize overtime hours. This may be illegal. We’ll discuss your employment rights below.
If you’re seeing the above signs, it may be time to plot your next move whether it is talking to your manager or exploring other places of employment.
Coming to the conclusion that you are underpaid isn’t a good feeling, but you shouldn’t storm into your boss’s office to air out your grievances without a plan. Here’s what to do when you’re underpaid:
- Take stock of the situation
- Put together your pitch
- Schedule a raise meeting with your boss
- Dust off your resume and play the field.
- Prepare to negotiate with a new employer
First, be honest with yourself. In some situations, it may not be the salary of your current job that is the problem because the salary is appropriate, Friedman said. Instead, you outgrew the role, and you’re ready for a new one inside or outside of your company.
Another factor to consider before asking for more money is whether the company can afford to give you an increase. Say you work in accounting for a small mom-and-pop business. Your salary may be lower than the industry average, but a raise may not be feasible. In this instance, pushing for a raise may just ruffle feathers, and it’s not worth the effort. It may just be time to move on.
If the company is capable of giving you a raise and seems receptive, start planning for the conversation. If you’re wondering how to ask for a raise when you’re underpaid and how to tell your boss you feel undervalued, we’ll tackle that next.
Write a sales pitch that will convince your boss you need a raise. Your pitch should be three or four sentences long explaining what you’re asking for, why you want it, and why it’s justified, Friedman said. Salary negotiation is just that — a negotiation. Be prepared for some pushback and be ready to explain the reason why you deserve a raise.
Don’t surprise your boss with an awkward conversation about money. Instead, request to schedule a meeting to discuss compensation. At the end of the meeting, ask what the next step is and when you can follow up.
Often, a raise has to go through many layers of bureaucracy before you see the money. Human resources may have to give a stamp of approval. If you work for a company with clearly defined salary bands, human resources may even have to change your title to give you a raise, Friedman said.
If you decide to look for opportunities elsewhere, pull out your resume, and make updates. Add new responsibilities, titles, or certifications you’ve gained since the last refresh. Ask a few people to proofread the resume to ensure there are no typos. Update your LinkedIn profile and start engaging with headhunters.
Negotiating a higher salary with a new employer can be tricky if they ask what you’re currently making. Some states and cities even prohibit employers from inquiring about past salaries. If you don’t live in a location that regulates salary history questions, try to ask the salary range for the position early in the process to put the ball in their court.
“Your goal is always to get the other person to say the number first…whoever says the number first loses,” Friedman said. If the budget for the position is more than what you ask for, saying your salary requirement first can leave money on the table. After you get a few solid job offers, you can try using them as leverage to negotiate a raise or promotion with your current employer.
You have the right to earn at least minimum wage. The Fair Labor Standards Act (FLSA) has set the federal minimum wage at $7.25 per hour and $2.13 per hour for tipped employees. However, 29 states and D.C. have initiated a higher statewide minimum wage illustrated in the photo below.
Source: Department of Labor
You can review the minimum wage for your state on the U.S. Department of Labor website. Counties and cities can also choose to adopt a higher minimum wage than the state guideline. Check with your local government as well to see if your salary is fair given legal requirements.
Your right to overtime
If you’re a non-exempt employee, you’re entitled to at least one-and-a-half times your hourly wage for the hours you work past 40 in one week. The U.S. Department of Labor is strict on how employers must handle overtime pay. According to the website: “An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee’s right to compensation for compensable overtime hours that are worked.”
In essence, if you need to work more than 40 hours in a week to do your job, the employer may not withhold overtime pay from you even if you didn’t get prior authorization. If your employer is asking you to clock in and out at odd times to avoid logging overtime, you may be underpaid at work, and your employer may be violating your rights.
Being a salaried worker doesn’t mean you’re automatically exempt from overtime. “The determination of whether you’re eligible for overtime is based more on your job duties than how your employer classifies you,” said Marc Keegan, an employment attorney based in Atlanta. If you earn a salary but you do not have an executive, administrative or professional role that exempts you from overtime, you may be entitled to additional pay if you work over 40 hours. The law also states that you need to make at least $684 per week ($35,568 per year), or $107,432 per year if you’re a highly compensated employee, to be exempt from overtime.
Employee vs. independent contractor classification
“One of the biggest loopholes that employers will engage in now is to classify people as independent contractors when they’re not actually independent contractors,” Keegan said. Employers typically do not withhold taxes or offer employee benefits to contractors, so it’s cheaper for them to hire you on a contract basis.
Working from home, signing an independent contractor agreement or receiving a 1099 does not automatically mean you’re a contractor under FLSA. You may be eligible for overtime and benefits if a company has misclassified you as an independent contractor when you’re doing the work of an employee.
The IRS states: “…an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done.”
Here are a few signs that you may be crossing the line between contractor and employee:
- You do your work on company equipment
- You’re assigned tasks that you can’t refuse
- You work under the company’s brand
- You regularly report to someone at the company
- You’re not free to do work with other companies as you please
- Your work processes are evaluated instead of just your final work product
How to report being underpaid
Underpaid at work and not sure what to do? The first step is checking your state labor website or the U.S. Department of Labor website for guidance. Your state may have an online complaint form or instructions for how to report being underpaid.
It’s usually a good idea to obtain legal counsel when filing a claim. The FLSA has an anti-retaliation provision that makes it illegal for an employer to punish you for doing so. It’s in the company’s best interest to settle with you if you have a valid claim — a negative effect of underpaying employees and losing in court is that the company will have to pay employee damages and attorney fees.
How can I properly ask for a raise? How to professionally ask for a raise is a pretty straightforward process. Schedule a meeting with your boss to talk about your compensation. Come prepared for the meeting with a pitch detailing why you want a raise and why you believe you deserve one. If you’re not given a definitive answer, ask when you can follow up on the conversation.
Can you sue for being overworked? You can sue a company for underpaying you if your employer is breaking the law by not paying you minimum wage or overtime, or misclassifying the type of worker you are causing you to miss out on wages or benefits. Every situation is different, so hiring a lawyer can help you determine whether you have a case.
What is an underpayment letter? If your employer underpays you for hours worked, you can send a certified underpayment letter to your employer to demand payment. The letter should include the hours you worked, how much you’re owed, and a deadline for when you expect payment. You can also file a complaint with your state. Speak with an attorney if you need help drafting an underpayment of wages letter.
Christy Rakoczy contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 8.70%1||Undergrad & Graduate|
|1.74% – 7.99%2||Undergrad & Graduate|
|1.74% – 7.99%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.74% – 7.99%5||Undergrad & Graduate|
|2.05% – 5.25%6||Undergrad & Graduate|
|1.86% – 6.01%||Undergrad |
|N/A7||Undergrad & Graduate|
|1.99% – 8.38%8||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for Navient.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
7 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
8 Important Disclosures for CitizensBank.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.