Chapter 6 Pay, Benefits, and Working Conditions MYPF Chapter 06 11-Sept-2001 Chapter 6 Pay, Benefits, and Working Conditions Understanding Pay, Benefits, and Incentives Compute payroll deductions and net pay. Identify optional and required employee benefits and recognize their value. Work Arrangements and Organizations

Gross Pay, Deductions, and Net Pay (wages/salary before taxes) Gross Pay Hourly wages Overtime Salary Commission Minus Deductions = Net pay Self-employed Individuals Pay equal to company profits Estimate taxes & pay quarterly — Deductions Net pay (paycheck)

Calculating Gross Pay Hourly pay = Hours worked during pay period x pay rate Overtime Pay = pay rate x OT hours x 1.5 Annual Salary divided by # of pay periods = Gross Pay Commission salary = Sales achieved x Commission percent © South-Western Educational Publishing

Your Paycheck Deductions are subtracted from your gross pay Your Pay Period may be Weekly (52 pay period in a year) Bi-weekly (26 pay period in a year) Bi-monthly (24 pay period in a year) Monthly (12 pay period in a year) Deductions are subtracted from your gross pay Required deductions: Withholding Income taxes (Federal & Possibly State) vary by income and state Social Security taxes 6.2% (employers match) Medicare Taxes 1.45% Optional deductions: Health, Dental, Vision Insurance Donations Savings plans (401K) Net pay (Take-home pay) is the amount of your paycheck.

Benefits and Incentives Profit sharing Paid vacations and holidays Employee services Child care Sick pay Leaves of absence Insurance Bonuses and stock options Pension and savings plans Travel expenses Product discounts

Employer Insurance Benefits Health insurance-portion paid by employee through deductibles Life insurance-employer may pay a standard coverage additional benefit amounts would be employee paid. Dental insurance-portion paid by employee through deductibles Vision insurance-portion paid by employee through deductibles

Flexible Work Arrangements Altered workweeks Flextime-employee chooses their daily hours Compressed workweek-40 hr work week in less than 5 days Job rotation-rotate from one task to another during scheduled day or week Job sharing-2 people share 1 full-time position Permanent part-time-work less than 32 hrs a week Telecommuting-working from home or non-office space

Labor Unions and Professional Organizations May be a requirement of employment to be member of a Labor Union or Professional Organization Labor Unions-group of people who work in similar occupations, organized for the benefit of all employees in these occupations paid through union dues. Purpose-protect the rights of workers Functions of unions Recruit new members Collective bargaining-salaries, benefits and working conditions Support political candidates who favor unions Provide support and services Types of unions Craft unions (bricklayers, carpenters) Industrial unions (skilled/unskilled in a particular place:AFL-CIO) Public-employee unions (teachers, firefighters, police)

Professional organizations Organizations that support particular occupations that require considerable training and specialized skills. Dues are collected as requirement of membership Examples American Bar Association-lawyers American Medical Association-doctors National Education Association-teachers Purpose Establish and maintain professional standards Publication keep professionals up-to-date in their field Lobby for Political Action for their profession