Services Employment and Reemployment Rights Act

 Services Employment and Reemployment Rights Act 

Job Structure

 

·         Relative pay for different jobs within the organization

 

Pay Level

 

·         Average amount the organization pays for a particular job.

 

Pay structure

 

·         Pay policy resulting from job structure and pay-level decisions.

 

Issues in developing a Pay Structure

 

·         legal requirements, market forces, Organization's goals

 

Legal Requirements for Pay: EEO

 

·         Employers must not base differences in pay on an employee's age, sex, race, or other protected status.
Any differences in pay must be tied to such business-related considerations as job responsibilities or performance.
The goal is for employers to provide equal pay for equal work.

 

Legal Requirements for Pay: Minimum Wage

 

·         lowest amount that employers may pay under federal or state law, stated as an amount of pay per hour.

 

Fair Labor Standards Act (FLSA)

 

·         federal law that establishes a minimum wage and requirements for overtime pay and child labor.

FLSA establishes a minimum wage of:
$7.25 per hour as of July 2014

FLSA also permits a lower "training wage"
paid to workers under age of 20 for up to 90 days
approximately 85 % of minimum wage

 

Legal Requirements for Pay: Overtime Pay

 

·         Overtime rate under FLSA is 1½ times employee's usual hourly rate, including any bonuses, and piece-rate payments.

Overtime pay is required, whether or not the employer specifically asked or expected the employee to work more than 40 hours.

 

Exempt Employees

 

·         managers, outside salespeople, and other employees not covered by FLSA requirement for overtime pay.

 

Nonexempt Employees

 

·         employees covered by FLSA requirements for overtime pay.

 

 

Legal Requirements for Pay: Child Labor

 

·         Children aged 16 and 17 may not be employed in hazardous occupations defined by U.S. Department of Labor.
Children aged 14 and 15 may work only outside school hours, in jobs defined as nonhazardous, and for limited time periods.
A child under age 14 may not be employed in any work associated with interstate commerce.
Exemptions include baby-sitting, acting, and delivering newspapers.

 

Legal Requirements for Pay: Prevailing Wages

 

·         Two federal laws govern pay policies of federal contractors:
Davis-Bacon Act of 1931
Walsh-Healy Public Contracts Act of 1936

Under these laws, federal contractors must pay their employees at rates at least equal to the prevailing wages in the area.

 

Davis-Bacon Act of 1931

 

·         covers construction contractors that receive more than $2,000 in federal money

 

Walsh-Healy Public Contracts Act of 1936

 

·         covers all government contractors receiving $10,000 or more in federal funds.

 

Product Markets

 

·         Organization's product market includes organizations that offer competing goods and services.

Organizations compete on quality, service, and price.

Cost of labor is a significant part of an organization's costs.

 

Labor Markets

 

·         Organizations must compete to obtain human resources in labor markets.

Competing for labor establishes minimum an organization must pay to hire an employee for a particular job.

 

Pay Level: Deciding What to Pay

 

·         Pay at rate set by market
Pay at rate above market
Pay at rate below market

 

Gathering Info about Market Pay

 

·         Bureau of Labor Statistics (BLS)
Society for Human Resource Management (SHRM)
World at Work

 

Equity Theory

 

·         employees think of their pay relative to their inputs - training, experience, and effort.
To decide whether their pay is equitable, they compare their outcome (pay)/input ratio with other people's outcome/input ratios.

 

If employees conclude that they are under-rewarded, they are likely to make up the difference in one of three ways:

 

·         They might put forth less effort (reducing their inputs).
They might find a way to increase their outcomes (e.g., stealing).
They might withdraw (by leaving the organization or refusing to cooperate).

 

Job Evaluation

 

·         Administrative procedure for measuring relative internal worth of the organization's jobs.

 

Compensable Factors

 

·         5 characteristics of a job that the organization values and chooses to pay for.
Experience
Education
Complexity
Working conditions
Responsibility

 

Pay Rates

 

·         Organization obtains pay survey data for its key jobs
Pay policy line is established
Pay rates for non-key jobs are then determined.

 

Pay Ranges

 

·         a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade.

 

Red-Circle Rate

 

·         pay at a rate that falls above pay range for the job.

 

Green-Circle Rate

 

·         pay at a rate that falls below pay range for the job.

 

 

Pay Differential

 

·         adjustment to a pay rate to reflect differences in working conditions or labor markets.
Many businesses in the U.S. provide pay differentials based on geographic location.
The most common approach is to move an employee higher in the pay structure to compensate for higher living costs.

 

Compa-ratio

 

·         HR should compare actual pay to pay structure, making sure that policies and practices match.

 

Current Issues in Pay

 

·         Pay During Military Duty
-The Uniformed Services Employment and Reemployment Rights Act (USERRA) requires employers to make jobs available to any of their employees who leave to fulfill military duties for up to five years.

Pay for Executives
-Executive pay has drawn public scrutiny because top executive pay is much higher than average workers' pay.
-Employees' opinions about equity of executive pay can have a large effect on the organization's performance.