CHAPTER 6 GROSS EARNINGS

IDENTIFY TERMS Compensation Salary, wage, pay or benefits received for the performance of service Double Time Twice an employee’s hourly rate Fair Labor Standards Act An act of law establishing the minimum wage and requiring employers whose firms are involved in interstate commerce to pay their employees time and one-half for all hours worked in excess of 40 hours per week.

IDENTIFY TERMS Gross Earnings The total amount of an employee’s pay before deductions. Hourly Wage Wages paid according to the number of hours worked Overtime All time worked in excess of straight time

IDENTIFY TERMS Straight Time Usually the first 40 hours worked per week. However, this number may vary from company to company. Template File A file that has a design, a layout, and formulas that can be used over and over again. Time and One-Half One and one-half times an employees hourly rate.

CALCULATE GROSS PAY Common Pay Periods Salary PaidPeriodNumber of Pay Checks WeeklyOnce per week52 paycheck each year BiweeklyEvery 2 weeks26 paychecks each year Semimonthl y Twice a month24 paychecks each year MonthlyOnce a month12 paychecks each year

CALCULATE GROSS PAY Example Assume you are paid $24,960 per year. The following table shows what you would earn for each of the common pay periods. Weekly$24,960 ÷ 52=$480 Biweekly$24,960 ÷ 26=$960 Semimonthl y $24,960 ÷ 24=$1,040 Monthly$24,960 ÷ 12=$2,080

COMPENSATION BY HOURLY WAGE Straight Time The wage paid each hour (hourly wage) Example To compute Miquel Smoot’s weekly salary (gross earnings) at $9.50 per hour, multiply the number of hours worked by the hourly rate 40 x $9.50 = $380 per week gross salary

OVERTIME When a company is engaged in interstate commerce where its products move from state to state, it is required by the FLSA to pay its employees time and one-half for all hours worked over 40 hours. This is considered overtime. Example Calvin Bruce worked 48 hours this week operating a press for the ZIP Printing Company. Calvin receives $12.75 per hour straight time, but what does he make for his 8 hours of overtime?

OVERTIME Example Calvin Bruce worked 48 hours this week operating a press for the ZIP Printing Company. Calvin receives $12.75 per hour straight time, but what does he make for his 8 hours of overtime? 1. Multiply straight time by (40 hours) by hourly rate. 40 x $12.75 = $ Subtract 40 hours (straight time) from hours worked. 48 – 40 = 8 hours overtime 3. Multiply overtime hours by time and one-half by hourly rate 8 x 1.5 x $12.75 = $153 overtime earnings 4. Add straight time and overtime earnings to calculate gross earnings. $510 + $153 = $663 gross earnings

DOUBLE TIME Some companies need workers on the job everyday of the year. A utility company is an example. Many of these companies offer an added compensation to those employees who work on Sundays and holidays. This compensation is in the form of double time; that is, double the worker’s hourly wage

DOUBLE TIME Example Destiny Singleton worked 52 hours in one week – 8 hours each weekday, 8 hours on Saturday, and 4 hours on Sunday, which was New Year’s Day (a holiday). Her hourly rate is $7.05. Destiny’s gross earnings would be computed using the following steps.

DOUBLE TIME 1. Multiply straight time by (40 hours) by hourly rate. 40 x $7.05 = $ Compute overtime by multiplying the number of overtime hours by time and one-half, then by the hourly rate. 8 x 1.5 x $7.05 = $ Compute double time by multiplying the number of hours worked then by 2, then by the hourly rate 4 x 2 x $7.05 = $ Determine total earnings by adding straight time, overtime, and double time amounts. $282 + $ $56.40 = $423.00