Chapter 6Pay, Benefits, and Working Conditions
Understanding Pay, Benefits, and IncentivesWork Arrangements and Organizations
Gross Pay, Deductions, and Net Pay
Gross PayTotal Pay Before DeductionsEquals Hourly Wages + Overtime
Hourly WageBased on 40 Hour Work Week
Overtime> 40 HoursPaid “time and a half”
Gross Pay, Deductions, and Net Pay
SalaryRegular hours, but no overtime pay
DeductionsAmounts subtracted from gross pay
Social Security*Federal* and State Income Tax*Medicare*Savings ContributionsHealth Insurance Costs
Gross Pay, Deductions, and Net Pay
Net pay“Take-home pay”Equals Gross Pay – Deductions
Estimating Annual SalaryHourly Rate * 2000
$8.00/hour: $8.00 * 2000 = $16,000
Gross Pay, Deductions, and Net Pay
Compute Gross PayRegular hours worked: 40Overtime hours worked: 9Regular rate of pay: $7.50
Compute Gross PayRegular hours worked: 45Regular rate of pay: $8.15
Gross Pay, Deductions, and Net Pay
Compute Gross PayRegular salary: $854 per monthOvertime rate: $12.54 per hour
12 hours of overtime
Calculate Monthly PayAnnual pay: $27,500
Gross Pay, Deductions, and Net Pay
Find State and Federal Withholding Taxes
Single PersonO AllowancesMade $256 Last Week
Gross Pay, Deductions, and Net Pay
Find State and Federal Withholding Taxes
Married Person2 AllowancesMade $846 Last Month
Gross Pay, Deductions, and Net Pay
Find State and Federal Withholding Taxes
Married Person4 AllowancesMade $1,560 Last Month
Benefits and Incentives
Benefits – Part of compensation in addition to pay
Profit SharingEmployee receives a portion of company profits“Incentive Pay” Increases productivity
Paid vacationsTypically two weeks per year to start
Benefits and Incentives
Paid HolidaysInclude Christmas, Thanksgiving, Labor Day, etc.If you work a holiday, “double time” or more
Employee ServicesExtras such as discounts on merchandise, free parking, day-care, tuition reimbursement, etc.
Benefits and Incentives
Sick PayNormally only available to full-time employeesAbout 3 – 10 days per year
Leaves of AbsenceWithout pay, but provides job securityFamily Medical Leave Act (FMLA)
50+ employees, must give 12 weeks off per year for birth of child or illness of self or family memberGuaranteed job when return and healthcare during leave
Benefits and Incentives
InsuranceHealth
Usually your company has a set provider such as Blue Cross/Blue ShieldTypically the employer pays for a portion and you pay for a portion
Dental/VisionEmployer chooses provider, share costs
LifeUsed in case of your death to supplement lost incomePay cash to a “beneficiary”
Benefits and Incentives
Bonuses and stock optionsAnother form of “incentive pay”Stock options give employees the right to buy a certain number of shares at a set price
Travel ExpensesMay provide company car or reimburse miles driven on personal car“Expense Account”
May be given a set daily allowance or must keep receipts to submit upon return
Benefits and Incentives
Pension and savings plansPensions
Provided by employerReceive a monthly check upon retirement“Vested” after a set number of years
Vested means you are entitled to retirement benefits
Employer-sponsored savings plans401(k) and 403(b)
Employee makes contribution to account, employer may match a portionEarnings grow tax-free
GOALSGOALS
Lesson 6.2
Work Arrangements and Organizations
Explain flexible job arrangements, such as flexible schedules, job rotation, job sharing, and permanent part-time employment.
Describe the role of unions and professional organizations in the workplace.
Flexible Work Arrangements
Altered workweeksFlextime
Choose hours: 6-3, 7-4, 8-5, 9-6Core time (most crucial to be there): 10-3May decreases absenteeism
Compressed workweekInstead of 5 days, 8 hours you’d work 4 days 10 hours
Flexible Work Arrangements
Job rotationTrained in more than one jobCan switch/rotate between positionsGreater job satisfaction
Reduces boredom
Helps when employees are absent
Job sharingTwo people share a full-time job
Flexible Work Arrangements
Permanent part-timeMany are choosing to work 16-25 hours per weekSaves employers money, while providing flexibility to workersBalance family/work life
TelecommutingWork from home or on the roadStay in contact with manager via phone, e-mail, internet
Labor Unions and Professional Organizations
Labor UnionsGroup of people in a similar occupation organized to protect rights of workersWorkers pay union dues which support their own lawyers, doctors and public officials
Labor Unions and Professional Organizations
Functions of unionsRecruit new membersEngage in collective bargaining
Negotiating terms of employment contracts – wages, benefits, management rights, etc.
Support political candidates that favor unionsProvide support services for workers
Labor Unions and Professional Organizations
Types of unionsCraft unions
Construction, railroad, printing
Industrial unionsSteel, automobile, industry
Public-employee unionsPolice, teachers, firefighters
Labor Unions and Professional Organizations
Professional organizationsCollect dues to provide the following
Newsletters ConferencesWorkshops
Some professions require membersAmerican Bar Association - lawyers
Labor Unions and Professional Organizations
GrievanceA formal complaint against management for violating a contract
SeniorityRanking of when each employee is hired
StrikeUnion members refuse to work until an agreement is met
LobbyingSupporting a political action or supporting legislation to benefit the profession