ch2_2012

ch2_2012 - Payroll Accounting 2012 Payroll Accounting 2012...

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Unformatted text preview: Payroll Accounting 2012 Payroll Accounting 2012 Bernard J. Bieg and Judith A. Toland Bernard J. Bieg and Judith A. Toland CHAPTER 2 CHAPTER 2 CHAPTER 2 COMPUTING WAGES & SALARIES COMPUTING WAGES & SALARIES Learning Objectives Explain the major provisions of the Fair Labor Standards Act Define hours worked Describe the main types of records used to collect payroll data Calculate regular and overtime pay Identify distinctive compensation plans Fair Labor Standards Act Enterprise coverage includes all employee if Two or more work in interstate commerce and $500,000 or more annual gross sales or produce goods for interstate commerce Plus many nonprofits (schools, etc.) regardless of annual sales volume or Individual employee coverage Employee whose company may not meet enterprise coverage, but in fringe occupation For example: drive for fleet that transports goods, with annual revenues equal to $225,000 Federal Wage & Hour Law provides for both these types of coverage. Note: Many family businesses are exempt! LO-1 Employee & Employer Defined An employer is an individual who acts directly/indirectly in the interest of an employer in relation to an employee An individual is an employee if he/she performs services in a covered employment Common-law relationship IRS test based on behavioral control, financial control or relationship between two parties Specific rules apply to employees of corporations, domestic employees, partners in partnerships and statutory employees LO-1 FLSA & Domestics Domestic help includes nannies, gardeners, chauffeurs, etc. Casual baby sitter and companions for aged/infirmed not covered These employees must earn minimum wage and overtime if they Work more than 8 hours/week or Earn at least $1,700 in a calendar year Live-in domestics need not be paid overtime LO-1 What is Minimum Wage? Includes all rates of pay including, but not limited to Commissions Nondiscretionary bonuses and severance pay On-call or differential pay Discretionary bonus (one which is not agreed upon or promised before hand) is not included in an employees regular rate of pay Other types of compensation not included in regular rate of pay include Gifts made as a reward for service Payments for a bona fide profit-sharing plan Vacation, holiday, sick day or jury duty pay Vehicle, tool or uniform allowances LO-1 Minimum Wage vs. Living Wage Minimum wage is $7.25/hour Living wage refers to local ordinances that vary between cities Law that attempts to keep low-wage workers wages on track with cost of living 100+ cities have local laws requiring employers that do business with the government to pay a calculated living wage Some states now include private industry LO-1 Tipped Employees Tipped employee regularly average more than $30/month in tips...
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ch2_2012 - Payroll Accounting 2012 Payroll Accounting 2012...

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