Salary Freeze

DEFINITION of 'Salary Freeze'

The action of a company suspending salary increases for a period of time. By freezing salary increases for a given period, management is hoping that the company will be able to produce better bottom line results by keeping fixed costs controlled. The downside of a salary freeze for a company is that employee morale will typically take a hit and the firm may end up losing valuable employees due to compensation issues.

BREAKING DOWN 'Salary Freeze'

A salary freeze typically occurs when a company is experiencing financial difficulties. It may choose to freeze salaries temporarily in order to minimize layoffs. Once the company is in a better financial position, the salary freeze would likely be lifted.

RELATED TERMS
  1. Flash Freeze

    A sudden shutdown in trading activity on an exchange. “Flash ...
  2. Freeze Out

    An action taken by a firm's majority shareholders that pressures ...
  3. Account Freeze

    An action taken by a bank or brokerage that prevents any transactions ...
  4. Salary Reduction Simplified Employee ...

    A plan offered by small companies - typically those with fewer ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Estate Freeze

    An asset management strategy whereby an estate owner aims to ...
Related Articles
  1. Personal Finance

    Careers With Declining Salaries

    Whether due to the economy or increased competition, these careers are coming with lower and lower salaries.
  2. Retirement

    Chipping Away At The Pension Freeze Trend

    Learn five steps that'll put your retirement back into your own hands.
  3. Investing

    Top 15 Colleges Where Graduates Earn The Most Money With Their Degree

    New data revealed from PayScale shows how much graduates are earning from over 1,000 schools around the country.
  4. Financial Advisors

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  5. Personal Finance

    What Is The Average Salary For An MBA Graduate?

    An MBA is often described as a surefire way to increase one's salary. It turns out that compensation for MBA graduates is actually more complicated.
  6. Professionals

    7 Tips For Getting The Salary You Deserve

    We teach you how to figure out the salary you should be making, and then how to get it.
  7. Investing News

    Freezing Oil Production Won't Help Prices (XLE)

    Freezing oil production at current levels may not be enough to cause a meaningful change in low oil prices
  8. Personal Finance

    The Top 10 In-Demand Jobs in America

    If you're searching for a job that's in demand and has salary increase potential, keep an eye on these ten positions.
  9. Personal Finance

    More Bonuses And Fewer Raises Affect Workers

    Companies are increasingly replacing salary increases with bonuses, much to the detriment of employees.
  10. Personal Finance

    Baseball Greats Who Were Paid Like Benchwarmers

    These legendary players changed the face of their sport - but they weren't in it for the money.
RELATED FAQS
  1. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ... Read Answer >>
  2. Can commissions be paid as a 1099 employee when I am currently a salaried employee?

    I am a Regional Sales Manager paid as regular salaried employee on a bi-weekly basis. Recently, they changed the structure. ... Read Answer >>
  3. What's the average salary of a business operations manager?

    Read about the average yearly salary of business operations managers, and find out which locations and industries offer the ... Read Answer >>
  4. What's the average salary of an investment banker?

    Compare average annual salaries of investment bankers based on position. Different levels of the career result in different ... Read Answer >>
  5. What's the average salary of an operations research analyst?

    Learn how much operations research analysts at different experience levels make on average across the nation and in specific ... Read Answer >>
  6. How does a cost-of-living adjustment (COLA) affect my salary?

    Learn how employers add cost-of-living adjustments to workers' salaries to offset the effects of inflation or aid in a lateral ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center