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

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Page 1: Management 4030- Managing Employee Reward Systems Fair Labor Standards Act Minimum Wage Provision –$5.15 / hr. –Advantages - wage floor, min. standard

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

Page 2: Management 4030- Managing Employee Reward Systems Fair Labor Standards Act Minimum Wage Provision –$5.15 / hr. –Advantages - wage floor, min. standard

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

Page 3: Management 4030- Managing Employee Reward Systems Fair Labor Standards Act Minimum Wage Provision –$5.15 / hr. –Advantages - wage floor, min. standard

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?

Page 4: Management 4030- Managing Employee Reward Systems Fair Labor Standards Act Minimum Wage Provision –$5.15 / hr. –Advantages - wage floor, min. standard

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?

Page 5: Management 4030- Managing Employee Reward Systems Fair Labor Standards Act Minimum Wage Provision –$5.15 / hr. –Advantages - wage floor, min. standard

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

Page 6: Management 4030- Managing Employee Reward Systems Fair Labor Standards Act Minimum Wage Provision –$5.15 / hr. –Advantages - wage floor, min. standard

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.