Wage Drift

Wage drift is the gap between the salary a company originally negotiated with an employee and what that employee actually ends up being paid by the end of a pay period, whether that is weekly or monthly. It typically happens when unpredicted demand forces a company to ask workers to put in extra hours. Those workers earn overtime compensation for the extra time, and over time that adds up to a gap above their originally negotiated salary.

This tends to show up most in industries where short-term demand is hard to predict, like tourism or fast-growing economies. More broadly, wage drift describes any situation where an employee’s actual pay ends up exceeding their agreed contractual wage, whether that is from undocumented pay increases, bonuses, overtime, or other extra compensation.