Chapter 6
Pay, Benefits, and
Working Conditions
Understanding Pay, Benefits, and
Incentives
Work Arrangements and
Organizations
Gross Pay, Deductions,
and Net Pay
Gross Pay
Total Pay Before Deductions
Equals Hourly Wages + Overtime
Hourly Wage
Based on 40 Hour Work Week
Overtime
> 40 Hours
Paid “time and a half”
Gross Pay, Deductions,
and Net Pay
Salary
Regular hours, but no overtime pay
Deductions
Amounts subtracted from gross pay
Social Security*
Federal* and State Income Tax*
Medicare*
Savings Contributions
Health Insurance Costs
Gross Pay, Deductions,
and Net Pay
Net pay
“Take-home pay”
Equals Gross Pay – Deductions
Estimating Annual Salary
Hourly Rate * 2000
$8.00/hour: $8.00 * 2000 = $16,000
Gross Pay, Deductions,
and Net Pay
Compute Gross Pay
Regular hours worked: 40
Overtime hours worked: 9
Regular rate of pay: $7.50
Compute Gross Pay
Regular hours worked: 45
Regular rate of pay: $8.15
Gross Pay, Deductions,
and Net Pay
Compute Gross Pay
Regular salary: $854 per month
Overtime rate: $12.54 per hour
12 hours of overtime
Calculate Monthly Pay
Annual pay: $27,500
Gross Pay, Deductions,
and Net Pay
Find State and Federal Withholding Taxes
Single Person
O Allowances
Made $256 Last Week
Gross Pay, Deductions,
and Net Pay
Find State and Federal Withholding Taxes
Married Person
2 Allowances
Made $846 Last Month
Gross Pay, Deductions,
and Net Pay
Find State and Federal Withholding Taxes
Married Person
4 Allowances
Made $1,560 Last Month
Benefits and Incentives
Benefits – Part of compensation in
addition to pay
Profit Sharing
Employee receives a portion of company
profits
“Incentive Pay”
Increases productivity
Paid vacations
Typically two weeks per year to start
Benefits and Incentives
Paid Holidays
Include Christmas, Thanksgiving, Labor Day,
etc.
If you work a holiday, “double time” or more
Employee Services
Extras such as discounts on merchandise,
free parking, day-care, tuition
reimbursement, etc.
Benefits and Incentives
Sick Pay
Normally only available to full-time employees
About 3 – 10 days per year
Leaves of Absence
Without pay, but provides job security
Family Medical Leave Act (FMLA)
50+ employees, must give 12 weeks off per year for
birth of child or illness of self or family member
Guaranteed job when return and healthcare during
leave
Benefits and Incentives
Insurance
Health
Usually your company has a set provider such as Blue
Cross/Blue Shield
Typically the employer pays for a portion and you pay
for a portion
Dental/Vision
Employer chooses provider, share costs
Life
Used in case of your death to supplement lost income
Pay cash to a “beneficiary”
Benefits and Incentives
Bonuses and stock options
Another form of “incentive pay”
Stock options give employees the right to buy a
certain number of shares at a set price
Travel Expenses
May 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 plans
Pensions
Provided by employer
Receive a monthly check upon retirement
“Vested” after a set number of years
Vested means you are entitled to retirement benefits
Employer-sponsored savings plans
401(k) and 403(b)
Employee makes contribution to account, employer may
match a portion
Earnings grow tax-free
Lesson 6.2
Work Arrangements and
Organizations
GOALS
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 workweeks
Flextime
Choose hours: 6-3, 7-4, 8-5, 9-6
Core time (most crucial to be there): 10-3
May decreases absenteeism
Compressed workweek
Instead of 5 days, 8 hours you’d work 4
days 10 hours
Flexible Work
Arrangements
Job rotation
Trained in more than one job
Can switch/rotate between positions
Greater job satisfaction
Reduces boredom
Helps when employees are absent
Job sharing
Two people share a full-time job
Flexible Work
Arrangements
Permanent part-time
Many are choosing to work 16-25 hours per
week
Saves employers money, while providing
flexibility to workers
Balance family/work life
Telecommuting
Work from home or on the road
Stay in contact with manager via phone, email, internet
Labor Unions and
Professional Organizations
Labor Unions
Group of people in a similar
occupation organized to protect rights
of workers
Workers pay union dues which support
their own lawyers, doctors and public
officials
Labor Unions and
Professional Organizations
Functions of unions
Recruit new members
Engage in collective bargaining
Negotiating terms of employment
contracts – wages, benefits, management
rights, etc.
Support political candidates that favor
unions
Provide support services for workers
Labor Unions and
Professional Organizations
Types of unions
Craft unions
Construction, railroad, printing
Industrial unions
Steel, automobile, industry
Public-employee unions
Police, teachers, firefighters
Labor Unions and
Professional Organizations
Professional organizations
Collect dues to provide the following
Newsletters
Conferences
Workshops
Some professions require members
American Bar Association - lawyers
Labor Unions and
Professional Organizations
Grievance
A formal complaint against management for
violating a contract
Seniority
Ranking of when each employee is hired
Strike
Union members refuse to work until an
agreement is met
Lobbying
Supporting a political action or supporting
legislation to benefit the profession