CHAPTER 2. COMPUTING & PAYING WAGES AND SALARIES Developed by Lisa Swallow, CPA CMA MS. Fair Labor Standards Act. FLSA - Federal Wage & Hour Law provides for two types of coverage Enterprise Coverage All EE of interstate commerce And $500,000 or more annual gross sales
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COMPUTING & PAYING WAGES AND SALARIES
Developed by Lisa Swallow, CPA CMA MS
plus many nonprofits
*Minimum wage is very different from ‘living wage’. Over 40 US communities now have local ordinances mandating employers who have local government contracts to pay a living wage to their employees (the amount minimally necessary to live in that community).
Putting someone on salary doesn’t mean they’re exempt!!
“Exempt” means exempt from overtime provisions of FLSA
Must be paid on salary and gross at least $250/week
ER can have different pay periods for different groups within same company!
FACTS: Salary quoted is $1,500/month - paid weekly - 43 hours in one pay period
FACTS: Salary quoted is $2,000/month - paid
semi monthly - 4 hours OT in one pay period
FACTS: Salary quoted is $2,000/month for 38 hour work week - paid semimonthly.
OT - regular pay between 38-40 hours/week; 1.5 after 40. Of 16 hours of OT in one pay period only 12 over 40
*Denominator is always number of hours in full time year - may be different between companies
FACTS: Salary quoted is $1,600/month for 35 hour work week -paid semimonthly. OT - regular hourly pay between 35-40 hours/week; 1.5 after 40 hours. Of 16 hours of OT in one pay period, 6 hours are over 40 hours weekly
FACTS: Salary quoted is $2,200/month -
paid biweekly - 11.5 hours OT in one pay period
(units produced in OT) x (1.5)(piece rate)
FACTS: 4,812 units inspected in a 47.25 hour week (600 of those units produced in extra hours). Employee is paid .12/each.Calculate using both methods.
Practice Calculating Piece Rate (#2)
Facts: Inspection rate = $.08/unit. An EE inspected 6897 units in 43.5 hours. She inspected 423 of these in overtime. Calculate using both methods.