1. PAY, BENEFITS & WORKING CONDITIONS

2. 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?

3. 2 TYPES OF PAY  Hourly  Salary

4. 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

5. 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

6. 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)

7. 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

8. 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

9. FEDERAL INCOME TAX  W4 Form – Employee’s Withholding Allowance Certificate  http://www.irs.gov/pub/irs-pdf/fw4.pdf http://www.irs.gov/pub/irs-pdf/fw4.pdf  Tax withholding tables - - http://www.irs.gov/pub/irs-pdf/p15.pdf (pg 47)http://www.irs.gov/pub/irs-pdf/p15.pdf  Pay period  Marital status  Number of Withholding Allowances  Examples  $475 gross; paid weekly; single, claiming 1  Single vs. Married  Married with more allowances

10. 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. Tax45.00 Total Deductions 81.34 Net Pay$393.66

11. 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%)

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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 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/100120http://www.gsa.gov/portal/category/100120  Some cases – employee pays expenses and is reimbursed later

21. 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

22. WORK ARRANGEMENTS  Altered workweeks  Job rotation  Job sharing  Telecommuting

23. 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)

24. 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

25. JOB SHARING  Job sharing – two people share one full-time position  Split salary and benfits  Nice for people who want to work part-time

26. 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