Total Rewards Flashcards
What are the 3 goals of a compensation program?
- Retain and motivate employees
- Offer fair reward for their achievements
- Create incentives for future efforts
What are the 3 elements of compensation?
- base wage or salary
- benefits
- incentives
define total rewards
sum of all compensation and benefits paid to an employee (monetary and nonmonetary)
- Non-monetary can include career opportunities, camaraderie, professional development, remote-work option
When was the Fair Labor Standards Act Passed?
1938
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What is the Usual Criteria to be considered an Exempt Employee?
- Must earn more than $684 per week
- Must be salaried—that is, not paid on an hourly basis
- Must perform certain exempt duties as part of his or her job (administrative, executive, or professional duties)
What is not covered by FLSA?
Hint: (VMWPT)
- Vacation, holiday, severance, or sick pay
- Meal or rest periods, holidays off, or vacations
- Premium pay for weekend or holiday work
- Pay raises or fringe benefits
- Procedures for discharging an employee, or immediate payment of final wages to terminated employees
What jobs can children 13 and under perform?
non-hazardous farm jobs with parent’s written consent
What jobs can ages 14-15 work?
farm jobs outside school hours and nonhazardous jobs for a limited period outside school hours
What is not covered by FLSA?
- Vacation, holiday, severance, or sick pay
- Meal or rest periods, holidays off, or vacations
- Premium pay for weekend or holiday work
What documentation must be kept for non-exempt employees for 3 years?
- Personal information, including employee’s name, home address, Social Security number, occupation, gender, and birth date if under 19 years of age
- Hour and day when the workweek begins
- Total hours worked each workday and each workweek
- Total daily or weekly straight-time earnings
- Regular hourly pay rate for any week when overtime is worked
- Total overtime pay for the workweek
- Deductions from or additions to wages
- Total wages paid each pay period
- Date of payment and pay period covered
What does the Portal to Portal Act cover?
employers must compensate workers for performing job-related tasks outside of work hours
What does the David Beacon Act do?
laborers and mechanics be paid the prevailing (average) wage on public works projects
- prevented employers from hiring out-of-town or out-of-state workers and paying them less than they would have to pay local workers
Define broadbanding
using a job grading structure with extremely wide salary bands
Define wage compression
occurs when there are small differences in pay regardless of experience, skills, level, or seniority
what does Compa-ratio calculate?
how close an employee’s pay is to pay at the middle of an organization’s pay range
What are the 4 compensation stages?
Start-up
Growth
Maturity/consolidation
Decline
What is the start-up compensation stage comprised of?
High salary
Low bonuses and benefits
What is the growth compensation stage comprised of?
Low Salary
Competitive Benefits
High bonuses
What is the Maturtity/Consolidation compensation stage comprised of?
Competitive salary, bonuses, and benefits
What is the Decline compensation stage comprised of?
moderate salary, bonuses, and benefits
Which of the following are employers required to pay for 1099 contractors?
Social Security
Federal Taxes
State taxes
OT/ On-call pay
none of them are required by employers
Are employers required to offer health insurance benefits to employees?
Over 50 employees, must offer or pay a fine
What’s the difference between defined-benefit pension plans and defined-contribution pension plans?
Defined-benefiit - fixed amount by employer
Defined-contribution - contributions by employee (401k)
define vesting
point at which employees are entitled to employer’s contriubutions
What are ERISA guidelines for vesting?
20% vested after 3 years of service, and vesting increases incrementally until 7 years of service, where contributions are 100% vested
What is the max someone can invest in an IRA
6000 per year, unless you are over 50, then it’s 7k
What special 401k rule is there for someone who becomes disabled?
People who become disabled can removed money from their accounts before the age of 59.5 without any penalty
What is a simplified Employee Pension Plan (SEP)?
pension plan funded by an employer
What are the 2 rules of a Simplified Employee Pension Plan (SEP)?
- All employees must receive the same contribution
- The max employer contribution is 25% of the employers salary or $57k (whichever is less)
What is the main difference between HMO’s and PPO’s?
PPO’s allow employees more choice of what doctors they see
What 3 things qualify someone for Medicare?
- 65 or older
- Have end-stage renal disease (meaning you are on dialysis or need a kidney transplant)
- Have been collecting Social Security Disability Insurance for more than 2 years
How long must employers keep payroll records and sales records?
3 years
What do Medicare parts A, B, C, and D cover?
A - hospital insurance and hospice
B - medical insurance
C - Advantage - dental vision, hearing, and prescription along with medical insurance
D - prescription coverage
When is wage compression likely to take place?
when comparable external pay rates rise faster than internal pay rates
When is an employee permitted to waive their rights under the Older Worker Benefit Protection Act? This is a case of an individual lay-off.
After being given 21 days to consider the agreement; With group lay-offs, this time frame is 45 days.
What is red circle pay?
When employees receive compensation that is above the maximum compensation for their salary range
How many credits must an employee earn by contributing to the Old Age, Survivors, and Disability Insurance program in order to retire and collect a percentage of their income?
40
Which employees should have similar compa-ratios?
a) employees with similar skills
b) employees with similar responsibilities
c) employees with similar levels of seniority
**d) all of the above
What’s the best way to respond to wage compression?
increase salaries of existing employees to match the salary of the new, more higher
employee
What is a green circle rate?
When an employee’s pay rate is lower than the minimum for their pay grade
