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Personal Finance - Ch. 6

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traci blanco

on 17 January 2014

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Transcript of Personal Finance - Ch. 6

Chapter 6 - Pay, Benefits,
Working Conditions

the total amount you earn before any deductions are subtracted
gross pay
Hours worked = 40
Hourly wage = $10.00
Gross pay = ?
time worked beyond the regular hours
8 hours/day...5 days/week
1 1/2 x reg. pay = overtime pay
45 hours
40 @ $10
5 @ $15
gross pay = $475
salary vs. hourly
usually do NOT receive extra pay for overtime
your paychecks are the same each pay period
usually paid every other week or 15th and last day of the month
salary of $30,000 / paid twice/month
gross pay = $1250/check
amounts subtracted from your gross pay
the amount left after all deductions are taken out of your gross pay
net pay
Regular Pay + Overtime Pay = Gross Pay

Gross Pay - Deductions = Net Pay
the total Social Security and Medicare tax, including employer matching contributions, paid by people who work for themselves
self-employment tax
*about 10% in US is self employed (non-agricultural)
money offered to encourage employees to strive for higher levels of performance
incentive pay

0%-50% = 3% commission
51%-80% = 4% commission
81% - 100% = 5% commission
101% - 120% = 6% commission
120% + = 7% commission
Types of Benefits & Incentive
Employee Services
Avg. daycare cost for infant in Indiana = $9,590
Leaves of absence:
usually unpaid but keeps job security
Group Insurance Plans
American families who are insured through their jobs average health care costs of $19,393 this year
Incentive Pay based on work done, years of service, or company or sales profits
gives employees the right to buy a set number of shares of the company's stock at a fixed or discounted price
stock options
funded by employer, when an employee retires, he/she receives a monthly check
401(k) - private employers

403(b) - government employers
*participants put in their own money and USUALLY employers will also contribute
Employer Savings Plan
Expenses covered when traveling for company purposes
Travel Expenses
non-monetary benefits are usually tax free
selection is optional
large companies have many options to choose from
of Benefits
when employees are entitled to the full retirement account after a specified period of time, for example 5 years
altered work weeks
work schedules & unions
money management

compressed work week
type of work schedule that allows employees to choose their working hours within defined limits
work schedule that fits the normal 40-hour work week into less than 5 days
compressed workweek
job design in which employees are trained to do more than one specialized task
job rotation
job design in which two people share one full-time position and split salary and benefits
job sharing
part time work usually provides some benefits to employee, such as job security
permanent part-time
16-25 hours per week
working from home or on the road

technology advances has made telecommuting more prevalent
Labor Unions and Professional Organizations
Functions of Unions
Recruit new members
engage in collective bargaining
the process of negotiating a work contract for union members

contracts include: working conditions, wages, overtime rates, hours of work, benefits, grievance procedures, seniority rights, mediation, and strike rights
collective bargaining
the length of time on the job and is used to determine transfers, promotions, and vacation time according to most union contracts
support political candidates who support members' interests
provide support services for members
unions are self-governing organizations that can be classified into 3 types:

craft unions
industrial unions
public-employee unions
types of unions
for those who practice that craft or trade
craft union
skilled, semi-skilled, or unskilled employees in a particular place, industry, or group of industries
industrial unions
municipal, county, state, or federal employees
public-employee unions
consists of people in a particular occupation that requires considerable training and specialized skills
professional organizations
professional organizations provide services for its members including:

establish and maintain professional standards
administer exams, accreditation's and admission requirements
publish professional journals to help keep members up to date
provide pension, retirement, and insurance benefits for members
participate in political action activities, such as
, which is an attempt to influence public officials to pass laws and make decisions that benefit the profession
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