management 4030- managing employee reward systems fair labor standards act minimum wage provision...
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Management 4030- Managing Employee Reward Systems
Fair Labor Standards Act
• Minimum Wage Provision– $5.15 / hr.– Advantages - wage floor, min. standard of living – Disadvantages - limits opportunity for unskilled, and the
youth; may encourage substitutes for labor.– Tipped employees - $2.13 / hr.
• Overtime Provision– 1.5 X Base Wage Rate for > 40 hours/ week– Only non exempt ees’ (hourly) covered– Employer Required to file non-exempt ees’ records of
work hours with Dept. of Labor
Management 4030- Managing Employee Reward Systems
FLSA (Cont’d) • Enforcement of FLSA
– Audits
– Investigations
– Remedies include back wages, attorney fees and court orders to stop violating FLSA
– Fines and imprisonment for willful violators
• Exemptions– Executives/ Managers
– Administrative Employees
– Professionals
– Outside Sales Force
• Challenge: Correct Classifications of Jobs
Management 4030- Managing Employee Reward Systems
Problems Managing Under the FLSA• Correct Classifications of Exemption Jobs
– Exs. Team leader? Telemarketers?
• Bonus Calculations - Non-discretionary bonus is part of overtime pay calculation.– Ex. Shift premiums, Xmas bonus, special duty pay.
• Independent Contractor or Employee?– Set own hours, own tools, own office & work site
• Tracking hours of non-exempts - Time clocks?• Inflexible work hours - bias to 40 hr. work week.
– 50/30 schedule --> 10 hrs. OT
• Comp Time - time off instead of pay for OT?
Management 4030- Managing Employee Reward Systems
Managing FLSA in the work place of the 1990s: Critical thinking Questions
Overtime Provision:• How do you manage the overtime of people who
telecommute from a home office?
• There is a negative incentive to provide variable pay for non-exempt employees because the “bonus” calculation becomes very complicated for overtime. Is there a way to avoid this problem?
Management 4030- Managing Employee Reward Systems
Equal Pay Act (1963)
Definition: Equal Pay for Jobs of Substantially Equal Work
• Federal law to insure that women are paid equal to men if they are doing similar work.
Factors that Define Equal Work• Skill• Effort• Responsibility• Working Conditions
Management 4030- Managing Employee Reward Systems
Equal Pay Act (Continued)
There are 4 Legal Exceptions to the EPA: Men and Women’s Pay on a similar job can be Different Due to Differences in...
1. Seniority
2. Performance or Merit ( A valid Supervisor-based evaluation of performance)
3. Quantity or Quality of Output (such as a piecework or sales commission plan)
4. Factor other than Gender such as Night shift differential or hazardous duty differential.