PAY, BENEFITS & WORKING CONDITIONS. STARTING A NEW JOB Union? Sick Pay, Bereavement Leave, Holidays, Paid Vacation Pension plan/Retirement Insurance.

PAY, BENEFITS & WORKING CONDITIONS

STARTING A NEW JOB

Union?

Sick Pay, Bereavement Leave, Holidays, Paid Vacation

Pension plan/Retirement

Insurance Health Dental Vision Life

Child Care Facilities?

Job sharing?

2 TYPES OF PAY

Hourly

Salary

GROSS PAY

Gross Pay – the total amount you earn before any deductions are subtracted.

Hourly Wages – regular hours worked times pay rate per hour $10.00 x 40 hours = $400.00

Regular hours – used to be 8 continuous hours with scheduled breaks plus an unpaid lunch period (8 am – 12 pm(noon); 1:00 pm – 5:00 pm)

Standard work week – used to be 40 hours in 5 –d ay period

Overtime – time worked beyond regular hours

Overtime pay rate – usually 1 ½ regular pay rate, not always $10.00 x 1.5 = $15.00

GROSS PAY CONT.

45 hours worked (using standard work hours/week, $10.00/hour and 1 ½ for overtime pay) 40 x $10.00 = $400.00 5 x $15.00 = $75.00 Gross pay = $475.00

Gross pay indicated on pay stub

YTD on pay stub = year – to – date

SALARY

Salaried employee - Works for a salary and not an hourly wage

NO Overtime (OT)

Usually stated as an annual (yearly) amount

Employer divides annual salary into equal amounts to be paid each pay period $50,000/year paid every 2 weeks 52 weeks in a year/2 weeks per pay period – 26 pay periods $50,000/26 pay periods = $1,923.08 (gross pay)

DEDUCTIONS

Deductions – Amounts subtracted from your gross pay

Mandatory – required by law Social Security/Medicare taxes Federal income tax State income tax – some states

Voluntary Health, Dental, Vision, Life Insurance Retirement Health Savings Plan

Deductions also listed on pay stub for current pay period & YTD

SOCIAL SECURITY/MEDICARE

FICA – Federal Insurance Contributions Act – (Social Security & Medicare)

OASDI – Old Age, Survivors, Disability Insurance (Social Security) 6.2% of gross pay Employee and Employer pays Maximum taxable earning $117,000 $475 gross * 6.2% = $29.45

Medicare (Hospital Insurance) 1.45% of gross pay Employee and Employer pays $475 gross * 1.45% = $6.89

FEDERAL INCOME TAX

W4 Form – Employee’s Withholding Allowance Certificate http://www.irs.gov/pub/irs-pdf/fw4.pdf

Tax withholding tables - - http://www.irs.gov/pub/irs-pdf/p15.pdf (pg 47) Pay period Marital status Number of Withholding Allowances

Examples $475 gross; paid weekly; single, claiming 1 Single vs. Married Married with more allowances

NET PAY

Net Pay – when all deductions are taken out of gross pay

Net Pay calculation – Gross Pay Minus Total Deductions (amount of your paycheck)

AKA “take-home pay”Gross $475.00

Deductions

OAISD $29.45

Medicare 6.89

Fed. Inc. Tax

45.00

Total Deductions

81.34

Net Pay $393.66

SELF-EMPLOYED REQUIREMENTS

Federal Income Tax – file estimated tax returns quarterly (4xs per yr.) with payments

Must also pay Social Security and Medicare taxes Must pay both employee and matching employer contributions to social

security and Medicare Social Security – 12.4% of gross income Medicare – 2.9% of gross income Self-employment tax – total Social Security and Medicare tax paid by

self-employeed individuals (12.4 + 2.9 = 15.3%)

BENEFITS AND INCENTIVES

Benefits – Forms of employee compensation in addition to pay Should be taken into account (evaluated) when considering a new job Profit Sharing Paid Vacations & Holidays Child Care Sick Pay Leaves of Absence Insurance Bonuses & Stock Options Pension & Savings Plans Travel Expenses

PROFIT SHARING

Profit sharing – plan that allows employees to receive a portion of the company’s profits at the end of the corporate year

Incentive pay – money offered to encourage employees to strive for higher levels of performance

Links employee compensation with company profit goals, giving employees incentive to work harder and reduce waste

PAID VACATION AND HOLIDAYS

Paid vacation – as it sounds – employee gets paid while on vacation Common setup: 1 week after 1 year; 2 weeks after 2 years; 3 weeks after 5

years

Paid holidays – paid time off for holidays Christmas * Thanksgiving Fourth of July Labor Day ** Memorial Day ** Sometimes employees required to work a holiday are paid double or more

than double regular pay rate

*Religious**Depends type of business – agriculture related, manufacturing

CHILD CARE, SICK PAY, LEAVES OF ABSENCE

Some companies provide on-site child-care facilities or even coverage of child-care expenses

Sick pay – allowance of days each year for illness of employee or immediate family member

Leaves of absence – Temporary leave without pay Maternity/Paternity Education/Degree/Training

INSURANCE

Health insurance – many employers provide group health insurance plans Some employers pay for all of the employee’s plan Most employers – employee pays for part of their own coverage and

dependents (spouse/children) Deductible – employee paid amount of the bill After deductible is met – a percentage of doctor

bills/prescriptions/hospitalization is paid Choose your deductible plan – lower the deductible – higher the rate for

that plan

Life insurance – cash benefit paid to designated person (beneficiary) when insured person dies. Purpose – partially offset the income lost when wage earner dies

INSURANCE CONTINUED

Dental Insurance – maximum benefit per year/per family member Orthodontia (braces) may not be covered Routine services – covered 80-100% (exams, cleanings, fillings) Major services – often covered 50% (root canals, bridges, crowns)

Vision Insurance – cover part or all of eye exams, prescription lenses/contacts – maximum benefit per year/per family member

BONUSES AND STOCK OPTIONS

Bonuses – incentive pay based on quality of work done, years of service, or sales & profits $100 year-end as reward for no serious on – the – job accidents Holiday bonus based on years of service Sales goal met – top-level managers receive bonus equal to percentage

of current salaries

Stock-purchase options – gives employees (usually executives) the right to buy a set number of shares of the company’s stock at a fixed price by a certain time Employees gain as long as stock price goes up Many types of plans

PENSION AND SAVINGS PLANS

Pension plans for retirement Funded by employer ** After retirement – employee receives a monthly check Might be able to withdraw some funds early Might be able to retire early if take reduced payments Vested – when employee is entitled to full retirement account after a

specific period of time

Employer-sponsored savings plans (401K/401B) – also retirement plans Employees contribute – employer might contribute Early withdrawals – financial penalty – unless (sometimes) for

education, first-time home purchase, medical expenses

TRAVEL EXPENSES

Jobs requiring travel - companies provide vehicle or mileage allowance if own car is used Federal government – POV reimbursement - http://

www.gsa.gov/portal/content/100715 While out of town – daily allowance or motel, meals & other expenses

paid Federal government per-diem: http://www.gsa.gov/portal/category/100120 Some cases – employee pays expenses and is reimbursed later

EVALUATING EMPLOYEE BENEFITS

Benefits add great value to employee’s position

Many not taxable (except bonuses & others paid in cash) – provide valueable coverage and advantages

Large companies usually have more optional benefits

WORK ARRANGEMENTS

Altered workweeks

Job rotation

Job sharing

Telecommuting

ALTERED WORKWEEKS

Flextime – allow employees to choose their working hours within defined limits Usually employees required to be present during specified core time

period Remaining hours can be chosen from around core time Allows to begin very early, or come later and stay later Benefits of flexibility – dropping off/picking up school children, medical

& other appointments

Compressed workweek – compressing 40-hours into less than 5 days 4 – 10 hour day (often followed by 3 days off)

JOB ROTATION

Job rotation – employees trained to do more than one specialized task then rotate from one task to antoher

Variety – reduces boredom & burnout

Cross training so if someone is absent, another knows the job – keep work flowing

JOB SHARING

Job sharing – two people share one full-time position

Split salary and benfits

Nice for people who want to work part-time

TELECOMMUTING

Telecommunity – work at home or on the road and stay in contact with manager and co-workers through e-mail, text, fax, cell phone calls, etc

Advances in technology making this more common

Often associated with computer related work – data entry, Web design, software development