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Final essay - Essay Example

Exempt Jobs are not subject to provisions of the ELSE with respect to minimum wage and overtime. Exempt employees Include most executives, administrators, professionals, and outside sales representatives. Nonexempt employees are those who are subject to the provisions of the FALLS. To qualify for any of the preceding exemption categories, all of the pertaining tests must be met. Because of their duties, responsibilities, and salaries, employees In exempt Jobs are not covered by the overtime provision of the ELSE.

Exempt” Is not a title, but a legal classification based largely on Job content. Exempt staffs are compensated on a salary basis without deductions for quality or quantity of work, except as permitted under the FALLS. Employees in nonexempt Jobs are covered by the overtime provisions In the FALLS and must be paid overtime at one and a half times the regular rate for all hours worked over 40 per pay period. Most problems occur for employers when they have employees in exempt status that do not meet all the necessary requirements for exemption.

This can result in lawsuits as seen with Merrill Lynch when they reached $37 million settlement for not paying overtime to a nonexempt financial analyst that what classified under the administrative exemption. Employees experience a dock in pay when they are misclassified as exempt. They can be over worked and taken advantage of under the exempt status, even when they are rightly classified. Employers face an issue of poor quality of work when they have employees that are being worked long hours without overtime pay. 2. Disparate treatment is the discrimination theory that outlaws the application of different standards to different classes of employees unless the standards can be hon. to be business related. Title VII prohibits employers from treating applicants or employees differently because of their membership in a protected class. Disparate impact is the discriminatory theory that outlaws the application of pay practices that may appear to be neutral but have negative effect on females or minorities unless those practices can be shown to be business related.

Disparate Impact can occur whether the employer Intended to discriminate or not. For example, a strength requirement might screen out disproportionate numbers of female applicants for a Job, and requiring all applicants for promotion to receive a retain score on a standardized test could adversely affect candidates of color. Disparate treatment Is Intentional. For example, asking women but not men If they plan to have children can be disparate treatment because the mere fact of unequal treatment may be taken as evidence of the employer’s intention to discriminate.

Another example would be if both Jill and Tom skip work one day, yet the employer fires Jill and not Tom. If the reason is because Jill is a female then this is disparate treatment based on sex. 3. ) The Fair Labor Standards Act was enacted in 1938 to in a standard work week. It also provides standards for equal pay, overtime pay, record keeping, and child labor. The ELSE introduced a maximum 44 hour, seven day work week and national minimum wage. Overtime for certain Jobs was guaranteed to pay time and a half.

Another component of the FALLS prohibited most employment of minors when it was originally drafted in 1932 by Hugo Black. However, in 1938 a revised version adopted an eight hour work day and 40 hour work week. Children under 18 were also not allowed to work certain dangerous Jobs. In 1947 the Portal to Portal Act was created to specify exactly what type of time was considered impassable work time. The 1949 ELSE amendment included changes to overtime compensation, raised the minimum wage from 40 to 75 cents, and extended child labor coverage. The 1955 amendment increased minimum age too dollar per hour.

Enterprise coverage was introduced with the 1961 ELSE amendment and raised minimum wag once again. The Equal Pay Act of 1963 was created to make it illegal to pay workers lower wages strictly based on their sex. The Age Discrimination in Employment Act of 1967 prohibited employment discrimination against persons 40 years of age or older. The Migrant and Seasonal Agricultural Worker Protection Act in 983 created migrant and seasonal workers with protection concerning pay and working conditions. In 2007 President Bush signed into law a supplemental appropriation bill which contains the Fair Minimum Wage Act of 2007.

This provision amended the ELSE to provide for the increase of the federal minimum wage by an incremental plan. The have been many amendments and changes to the ELSE since its conception in 1938, but the main components deal with sex, age, and minimum wage. 4. ) Defined benefit plans are a benefit package or option in which the employer agrees to give the specified benefit without regard to cost maximum. Vesting is a benefit plan provision that guarantees that participants will retain a right to benefits they have accrued even if employment under their plan terminates before retirement.

A defined benefit plan promises a specified monthly benefit at retirement. It may promise an exact dollar amount or it may calculate a formula such as 1 percent of average salary for the last 5 years of employment for every year of service with an employer. The defined benefit plan does not have vested benefits because the participant must meet retirement requirements or forfeit benefits. These are the same retirement benefits the leadership of many collective bargaining units fought so hard to obtain for their membership.

Employees covered by these plans didn’t have to worry about saving for retirement. These plans were typically generous, and long-term employees were often rewarded with pensions that allowed them to live comfortably in retirement. These plans also placed a large financial burden on employers. Since the return on the fund’s investments is uncertain, it’s possible that employer contributions may not be sufficient to meet its obligations to present and future retirees. Normally, a fund is evaluated each year to determine the level of funding required to match assets with liabilities.

When investments perform poorly, the employer’s contributions need to increase, and this added expense can significantly impact earnings. When the funds are actually dispersed at time of retirement, they can be very high. This is especially true if an employee has spent many years at an establishment. Defined contribution plans are a benefit change in benefit costs over time reduces the amount of coverage unless new dollar limits are negotiated. A defined contribution plan does not promise a specific benefit mount at retirement. Instead you and/or your employer contribute money to each employee’s individual account in the plan.

In many cases employees are responsible for choosing how theses contributions are invested and deciding how much to contribute from each paycheck through pretax deductions. The value of an employee’s account depends on how much is contributed and how well the investments perform. Vesting means the employee has earned the right to benefits without the risk of forfeiting them. Any contributions made by the employee to a pension fund are immediately and irrevocably vested. Contribution plans have full vesting after 3 years or 20 percent after 2 years and 20 percent each year after, resulting in full vesting after 6 years.

Since the performance of an investment will always carry some uncertainty, the employee can never be 100% confident of their benefits derived from a defined contribution plan. The employer’s obligation can be readily calculated each year, and does not rise or fall as the performance of the retirement account fluctuates. This provides a significant advantage to employers versus a defined benefit plan. Unfortunately, this means employees bear the risk heir retirement funds may not be sufficient to provide them with a comfortable standard of living once retired.

When that occurs, the employee may be faced with a decision to delay retirement or find a source of supplemental income when they retire. Many employers will match up to 5% contributions that results in a large payout t the end of employment. These contributions are not taxed until the funds are actually taken out of the account by the employee.