Settle wage increase (3,2)
I believe the answer is:
pay up
'settle' is the definition.
(paying up is a kind of settling)
'wage increase' is the wordplay.
'wage' becomes 'pay' ('pay' can be a synonym of 'wage').
'increase' becomes 'up' (upping is a kind of increasing).
'pay'+'up'='PAY UP'
(Other definitions for pay up that I've seen before include "Give me the money!" , "Settle" , "Discharge a debt" , "Hand over the money" .)