What is a pay freeze?

A pay freeze is when a company suspends any employee salary and wage increases. This is typical during a time of hardship for a company, where they are attempting to cut down on costs from rising wages and salaries. It is not permanent, and the freeze often is for a set amount of time, such as a quarter.

Some pay freezes do include clauses for increases for employees due to inflation. Many employees have inflation raises, which may or may not be included in pay freezes. Along with that, most pay freezes do freeze any potential bonuses.