Chapter 6

Pay, Benefits, and

Working Conditions

Gross Pay, Deductions, and Net Pay

Gross pay -- Amount earned for work

Hourly wages = Hours worked x pay rate

Overtime hours worked over the

normal work week

Gross Pay, Deductions, and Net Pay

Salary Amount earned for work

Deductions amounts withheld from salary for

taxes, insurance and other benefits

Net Pay Take-home pay

Net Pay = Gross pay - Deductions

Pay Rates
Salary employee is paid the same
amount regardless of hours worked
Hourly employee is paid for each hour
worked
Piecework employee is paid for each
unit produced
Commission employee is paid a
percent of sales made

Deductions

Federal Income Tax

State Income Tax
FICA
Medicare
(self-employment
tax)

Other Deductions

Credit union
Insurance
Union dues
Retirement

Benefits and Incentives

Profit sharing employees receive a portion of

the companys profits each year (incentive
pay)
Paid vacations/holidays while you are on
vacation, you are paid as usual
Employee Services free parking, tuition
reimbursement, wellness programs,
recreational programs
Child Care on-site facilities, reimbursements
for expenses

Benefits and Incentives

Sick Pay 3-10 days paid for sick leave
Leaves of Absence allows employees
to temporarily leave their jobs for certain
reasons (complete education, important
events)
Insurance

Medical
Dental
Vision
Life

Benefits and Incentives

Bonuses and Stock Options bonuses
are based on quality of work, years of
service, sales, profits stock options
gives employees the right to buy a set
number of shares at a fixed price
Pension and Savings Plans pension is
completely funded by the employer
401(k) or 403(b) contributions are made
by employee and employer
Travel Expenses hotel, meal, travel,
car,miles

Flexible work Arrangements

Altered work week

Flextime employees choose working

hours within defined limits (core time periodall
employees must be at work)

Compressed work week employees work

a 40 hour week in fewer days (4 10-hour
days)

Job rotation employees are trained to

do more than one job so that they can
rotate from one job to another

Flexible Work Arrangements

Job sharing two people share one fulltime position they often split work days
and benefits offered
Permanent Part-time employees work
less than 40 hours each week often with
no benefits
Telecommuting Employees work
mostly from home but check in at the
office as needed

Labor Unions
Labor union a group of people who
work in the same or similar occupation
organized for the benefit of the group
Collective bargaining process of
negotiating terms of employment for
union members
Seniority the last workers hired will be
the first to be let go if layoffs are
necessary

Main Functions of Unions

Recruit members
Negotiate working conditions (pay,
benefits, etc.)
Offer member services (insurance,
discounts, legal advice relating to the
job)
Lobby (to benefit members interests)

Types of Unions
Craft unions practice a craft or trade
such as bricklayers, carpenters,
ironworkers
Industrial unions -- skilled, semiskilled
workers in a particular industry (auto
workers, Teamsters, steelworkers)
Public-employee unions municipal,
county state workers (teachers, road
workers, firemen, police)

Professional Organizations

One particular occupation

Collect dues
Requires training and specialized skills
Lobbying
Administer exams, and admission
requirements to maintain professional
standards.