Tag Archives | wage rate

Wage Rate

See Also:
How to compensate sales staff
Compensation Plan
Equity Interest
Capital Project
Damage Claim

Wage Rate Definition

The wage rate definition is the rate of compensation for a worker. It is one of the central themes of the study of human resources. It is determined by 2 factors: productivity at work or number of production hours.

This study is known as wage rate economics. It is an important factor to economics because the wages of the average worker form an important factor in both microeconomics and macroeconomics. That is, it effects both buyer behavior and governmental policy.

Wage Rate Explanation

Wage rate, explained as the compensation plan for any employee or set of employees, establishes the cost as well as income of human resources. Explained simply, wage rates are based on the amount produced or the number of hours worked. Sales staff, for example, are given a commission based on the number of sales they make. Conversely, hourly employees are paid a certain amount for each hour they spend at work.

Additional compensation methods exist for employees. Health benefits, medical benefits, bonus’, promotions, and even cafeteria plans amount with the above wages to result in the total wage rate for staff. Fringe benefits, like a company car or free products, are not technically considered part of the wage rate which a worker takes.

Many nations require a minimum amount of income per worker. For wage rate, us government calls this the “minimum wage”. the law requires businesses to pay employees at least this much money in order to continue operations.

Wage Rate Example

Let’s look at the following wage rate example. Hank is a worker at a major oil company. Hank, a father of 5, works to support his family. He must make a certain amount of income every day to make sure that he can provide for the necessities which his family needs.

Derek, on the other hand, works for the same oil company. As a young and successful man, Derek is looking to optimize his benefit. Derek is looking for a compensation plan that grows with his productivity. As a result, Derek is willing to risk something if the gain for success is higher.

Both men are sales staff of the same oil company. Luckily, the company has a “choose-your-own” wage rate determination. They can offer this because of the years of study of their employees and work habits. While one is paid an hourly wage, the other is paid mostly through commissions. This allows each to have the work environment that they want. It proves to be a successful plan: both men achieve the same level of productivity. If meeting with a manager, both men will say that they enjoy their work. It is because of the flexible wage rate decision that each can create the plan that best suits their lifestyle.

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wage rate, Wage Rate Example, Wage Rate Definition

wage rate, Wage Rate Example, Wage Rate Definition

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Professional Employer Organization (PEO) FAQs

See Also;
What is a PEO?
Advantages of Professional Employer Organizations
How to Select a PEO
PEO Compared to Outsourcing Payroll
National Association of Professional Employer Organizations

Professional Employer Organization FAQs | PEO FAQs

Refer to the following Professional Employer Organization FAQs for more information about PEOs.

What Kind of a Business Uses a Professional Employer Organization (PEO)?

The PEO business arrangement will literally work for any type of business including both For-Profit and Not-for-Profit entities. Co-employment relationships range from professional offices to high technology to retailing to manufacturing. In terms of size, PEO customers include the two person professional office, as well as, the one to three hundred person manufacturing firm.

How will a PEO arrangement affect My Employees?

Your Employees maintain their eligibility for benefits, pay rate and job seniority that they have accumulated and in many cases find that they have access to better benefits through the PEO business arrangement.

How will a PEO arrangement affect control of My Employees?

Your Employees are under Your Direct Control and Supervision. The Business Owner determines wage rates, working hours, job responsibilities, job performance, compliance with rules and regulations, etc.

How will the change from my current system to a PEO arrangement take place?

The PEO will conduct an orientation for all of your Employees. This is the time to answer questions and explain the benefits of the Business Owner/PEO Management Model. Furthermore, employees always feel more comfortable when they know the who, what, when, where and why of the change.

Are PEOs recognized as employers at the state and federal levels?

Yes, PEOs operate in all 50 states. The State of Texas has legislated specific licensing, registration, and regulation for PEOs. Texas statutorily recognizes PEOs as the employer or “co-employer” of employees for many purposes, including workers’ compensation and state unemployment insurance taxes. In addition, the IRS has accepted the right of a PEO to withhold and remit federal income and unemployment taxes for employees. The IRS has also promulgated specific guidance confirming the authority of PEOs to provide retirement plans to workers.

How will a PEO arrangement help the Business Owner to control costs?

The PEO provides significant technology, service infrastructure and platforms to assure compliant delivery of contracted services. In addition, the PEO provides time-savings by handling routine and redundant tasks associated with the following:

Who is responsible for the payment of wages and employment taxes?

By contract, the PEO assumes responsibility and liability for payment of wages and compliance with the rules and regulations governing the reporting and payment of federal and state taxes on wages paid to its “co-employees”. PEOs have long established their role as reporting income and handling withholding, FICA, FUTA and SUTA. In 2002, the IRS issued guidance confirming the ability of PEOs to offer qualified retirement benefits.

Who is responsible for employment law and regulatory compliance?

As co-employers, both the Business Owner and the PEO have compliance obligations. The Customer Service Agreement (CSA) addresses specific co-employer responsibilities regarding employment laws and regulations, including the following:

  • Federal, state, and local discrimination laws
  • Title VII of the 1964 Civil Rights Act
  • Age Discrimination in Employment Act
  • ADA
  • FMLA
  • HIPAA
  • Equal Pay Act
  • COBRA

Is a PEO required to have in-force Current Workers’ Compensation Insurance?

The “Staff Leasing Services Act” does not require a Professional Employer Organization to maintain current Workers’ Compensation Insurance for its’ “co-employees”; however, private employers that contract with governmental entities are required to provide Workers’ Compensation coverage for each employee working on a public project.

If you want to determine which candidates are the right fit for your company, then use our 5 Guiding Principles For Recruiting a Star-Quality Team.

Professional Employer Organization FAQs, PEO FAQs

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Professional Employer Organization FAQs, PEO FAQs

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