Pay, Benefits and Working Conditions

1
Chapter 6

• Pay, Benefits and Working Conditions

2
Lesson 6-1

• Understanding Pay, Benefits Incentives

3
Gross Pay, Deductions Net Pay

• Total amount you earn before any deductions are
  subtracted
• Paycheck maybe weekly, bi-weekly or monthly

4
Hourly Wage

• Payment for hours you worked
• Pay rate x no. of hours worked gross pay

5
Overtime

• Time worked beyond the regular hours
• Standard work week 5 days/weeks, 8 hrs per day
  40 hours
• Compensation for overtime is 1.5 times the
  regular rate of pay.

6
Salary

• Salaried employees dont receive overtime
• Gross pay is same as salary or annual pay
• Annual salary will get divided into equal pay
  checks

7
Deductions

• Amounts subtracted from your gross pay
• Required deductions Federal, state, local,
  social security and medicare taxes (required by
  law, both you and the employer pay).
• Optional Deductions Insurance, Donations,
  Savings Plan, etc(may not be withheld without
  your written consent. These would be subtracted
  from your net pay).

8
Net Pay

• Amount you receive after everything is deducted.
• Reg. pay overtime gross pay
• Gross pay deductions net pay

9
Self-Employed Requirements

• Must file estimated tax returns quarterly,
  estimate upcoming taxes to be paid divided by
  4.
• Self-employed must pay social security tax and
  Medicare
• Since self-employed must pay both employee and
  employee tax contributions
• Self-Employment tax-total social security and
  Medicare tax paid (15.3)

10
Benefits Incentives

• Forms of employee compensation in addition to pay
• Common benefits are Health Ins., vacation and
  sick time.
• Some benefits are required by law such as
  unemployment and works comp.

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Types of Benefits

• Profit Sharing
• Paid Vacation Holidays
• Employee Services
• Child Care
• Sick Pay
• Leave of absence

• Insurance
• Bonuses Stock Options
• Pension Savings Plans
• Travel Expense
• Evaluating Employee Benefits

12
Profit Sharing

• Plan that allows employees to get a portion of
  the companies profit
• Incentive Pay-Money offered to encourage
  employees to obtain higher performance levels.

13
Paid Vacation Holidays

• Most provide set amount of paid vacation time
• 1 year 1 week of vacation
• 3 years 2 weeks of vacation
• Paid Holidays
• Christmas, Labor Day and others
• If working on a holiday, typically you will
  receive double pay.

14
Employee Services

• Extras that companies offer to increase moral and
  working conditions
• Maybe discounts on merchandise sold or made
• Maybe recreation programs, free parking,
  day-care, wellness programs

15
Child Care

• Major issue for working parents
• Some companies may have an on-site daycare with
  discounted rates for the employee.

16
Sick Pay

• Allowances of days each year for illness with
  pay.
• Typically it is 10 days a year

17
Leave of Absence

• Employees temporarily leave without pay for
  certain reasons
• It gives job security and permits you to take
  time off for important life events
• Having a child
• Care for a sick member of the family
• Education

18
Insurance

• Health
• Has deductible employee pays amount.
• After deductible has been met plan pays 80 of
  doctors bills and 100 of hospital bills,
  typically.
• Life
• Pays cash benefit to the beneficiary after
  insured dies.
• Purpose is to partially offset income lost when
  wage earner dies.

• Dental
• Provide max benefit per year per family member
• Braces usually not covered
• May have small deductible
• Vision
• Covers cost of prescription lenses and eye exams

19
Bonuses Stock Options

• Bonuses are incentives pay based on quality of
  work, years of service and goals met
• Stock purchase options, is employees option to
  buy company stock at a fixed price
• Stock goes up employees gain money

20
Pension Savings Plans

• Pension plans are funded by employees
• When employee retires they receive monthly checks
• Vested-entitled to the full retirement account
• Employee sponsored savings plans are 401K
  (private) or 403B (government)
• Employees contribute money as well as employers
• Employers dont bear full cost of these.

21
Travel Expenses

• Employees that must travel for work usually
  receive a company car or reimbursement for
  expenses.

22
Evaluating Employee Benefits

• Larger the company the more benefits you receive
• Flexibility in the selection of benefits is
  common.

23
Lesson 6-2

• Work arrangements and organizations

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Altered Work Weeks

• Used to get away from 8 to 5 work week
• Flextime-flexible schedules allowing employees to
  choose working hours within limits.
• All employees must be present during core time
  period peak hours
• Negotiate start times
• Increased employee job satisfaction
• Compressed work weeks- work schedule that fits 40
  hour week into less than 5 days.
• Strenuous physical and mental jobs are probably
  not a good fit.

25
Job Rotation

• Job design in which employees are trained to do
  more than once specialized task.
• Employees rotate jobs
• Gives employees more variety, reduces boredom and
  burnout.
• Employer likes it because if someone is absent
  another employee can take over and get the work
  done.

26
Job Sharing

• Job design in which two people share one full
  time position
• You split salary and benefits
• Attractive to people who want part time work
• Lowers fatigue, reduces absentee and tardiness

27
Permanent Part-Time and Telecommuting

• Part-time is 16-25 hours/week
• Companies save on salary and benefits
• Parents will small children, older employees use
  part-time
• Telecommuting is people work at home, on the
  road, stay in contact by email, phone or fax.
• Employees who do this are data entry, web design,
  software development
• Does not work well for people who require
  interaction with people to complete tasks

28
Labor Unions

• A group of people who work in the same or similar
  occupations organized for the benefit of all
  employees

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Functions of a Labor Union

• Recruit new members
• Engage in collective bargaining
• Support political candidates in favor of union
• Provide support services to members
• Labor unions help employees negotiate wages,
  working conditions and provide education.

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Functions of Labor Unions

• collective bargaining-process of negotiating the
  terms of employment
• Main function
• Union contractor provide seniority rights-last
  worker hired, first fired when jobs are cut.
• When employer and union cant agree a mediator or
  arbitrator (neutral 3rd party) is brought in
• If they cant come to terms a strike occurs
• members refuse to work until agreement
• made
• Dues are collected each year to fund

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Types of Unions

• Craft Unions
• Limited to people who practice a craft or trade
• Example brick layers, carpenters, rail road
  employees
• Public Employee Unions
• Municipal, County, State or Fed employees
• Examples Teachers, Fire Fighters, Police
  Officers
• Industrial Unions
• Skilled, semi-skilled or unskilled employees at a
  particular place or industry.
• Example Teamsters, AFL-CIO, United Auto Workers
• Countries basic industries are very heavily
  unionized

32
Professional Organizations

• Is organization of people in a particular
  occupation that requires considerable training
  and specialized skills.
• Members pay dues to fund
• Example American Bar Association, American
  Medical Association, National Education
  Association
• Some occupations memberships are required
• Members must establish and maintain standards and
  publish journals to help keep members up to date.
• Lobbying-professional organizations try to
• influence public officials to help their
• organization.