Base Pay Structures (Quiz 4) Flashcards
What is pay a powerful tool for, what does it impact and what does it influence?
Meeting organization’s goals, impacts employee attitudes/behaviors, influences kind of people you attract or stay with org, important to employees, influences how evaluate relationship with employer.
What does pay secrecy help a company do?
Stay competitive.
What can companies not discuss with other companies? What can they do with other local similar companies?
Cannot discuss selling prices or specific wages they pay employees (cannot conspire to set prices or set/keep down wages). Can conduct salary surveys with similar organizations.
What are the 5 legal requirements for pay?
EEO, minimum wages, overtime pay, child labor, prevailing wages for federal contractors.
EEO (Legal Reqs for Pay)
Employers can’t base difference in pay on age, race, sex, protected status. Difference has to be in business-related considerations like responsibilities & performance, goal is for employers to provide equal pay for equal work.
What is minimum wage? (Legal Reqs for Pay)
Lowest amount an employer can pay under fed or state law, pay/hour. (FLSA establishes min wage and reqs for OT pay and child labor).
What is the current issue with minimum wages?
Often tend to be lower than earnings required for full-time worker to rise above poverty level. Number of cities have instituted living wage, min wages based on cost of living in a certain region.
What is OT? Who does it apply to?
Rate is 1.5 times employee’s usual hourly rate plus bonuses and piece-rate payments. Applies to hourly jobs and non-exempt employees (paid OT if they work more than 40 hours but at least 40 even if they don’t work 40). Exempt employees do not apply (teachers, salespeople), salary means org thinks you can manage own time to get work done.
When is OT pay required? What happens if an employer doesn’t pay time and half and how does FLSA know if this happens?
Hourly workers who work over 40 hours regardless if manager asked them to. If employer knows and doesn’t pay, employer might be violating FLSA. Employee must report but this does not happen often.
What are different age group stipulations for child labor? What do some states restrict and what exemptions exist?
Children 16-17 cannot be employed in hazardous occupations, 14-15 can only work outside school hours for limited times in nonhazardous jobs. Under 14 can’t be involved in any business associated with interstate commerce unless family business. Some states restrict number of hours times of day that minors 16 and older work, exemptions include babysitting, acting, newspaps
What federal laws govern pay policies of federal contractors? What must contractors pay? (look at example on slide 24)
Davis-Bacon Act 1931, Walsh-Healy Public Contracts Act 1936. Federal contracts must pay employees rates
at least equal to prevailing wages in that area. Must use and pay prevailing wages to put their bids on even footing with local wages.
How do you set a pay level?
Set a pay rate relative to supply of professionals: pay at rate set by market (average supply), at rate above market (low supply), at rate below market (high supply).
How do you gather information about market pay?
Benchmark (organization compares its own practices against those of successful competitors) with pay surveys, trade/industry groups, professional groups, Bureau of Labor Statistics, SHRM, World at Work.
What is a pay range? What is a pay rate that falls above pay range for the job? Below? What would you do to correct these?
Set of possible pay rates defined by max, min and midpoint for an employee with a particular job or job within a particular pay grade. Employee can be in band or outside of it. Red-circle is a rate that falls above range for job, give a bonus with no raise (recognition), green falls below, give them a raise to help catch up.
What is a pay differential?
Adjustment to pay rate to reflect differences in working conditions or labor markets. Common approach is to move them higher in pay structure but if they return where they came from they will be red-circled. Should providing a sliding scale COLA. As time in location, COLA goes down and wages go up.
