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