Accounting 117 - Chapter 2 (Computing Wages and Salaries)
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1. At least two employees engage in interstate commerce or produce goods for interstate commerce.
2. The business has annual gross sales of at least $500,000
Individual Employee Coverage
Under individual employee coverage, the FLSA covers a worker if the employee either engages in interstate commerce or produces goods for such commerce.
Coverage depends on the activities of the individual employee and not on the work of fellow employees,the nature of the employer's business, or the character of the industry as a whole.
Any person acting directly or indirectly in the interest of an employer
An individual is an employee if he or she performs services in a covered employment.
A common-law relationship of employer and employee exists when the employer has the right to control both what work will be done and how it will be done.
- 1. Is free of direction and control in the performance of the work.
- 2. performs services outside the usual course of business of the company that has hired the contractor.
- 3. customarily engages in a independent occupation.
Consists of services of a household nature performed in or about a private home of the person who employs the domestic.
Direct Care Workers
Provide essential home care assistance to the elderly and people with injuries, illnesses, or disabilities.
Workers who qualify as independent contractors under common law, but are taxed as employees for social security, are statutory employees.
Statutory Nonemployees (direct sellers and licensed real estate agents)
For federal tax purposes, they are considered to be self-employed as long as their earnings are based on the amount of sales and their services are performed under a written contract stating that they will not be treated as employees for federal tax purposes.
Refers to renumeration paid on a hourly or a piecework basis.
Refers to the renumeration paid on a weekly, biweekly, semimonthly, monthly, or yearly basis.
A bonus normally based on hours worked, units produced, production efficiency, or work quality
A bonus not agreed upon, announced, or promised before payment, is not included in an employee's regular rate of pay.
Is a gift or gratuity given by a customer in recognition of some service performed for him or her.
Is one who engages in an occupation in which tips of more than $30.00 a month are customarily and regularly received.
The tip credit reduces the employer's liability for Medicare and Social Security payments.
Fixed and regularly recurring period of 168 hours-seven consecutive 24-hour periods.
Include those tasks employees must perform and include any work of consequence performed for the employer.
To which money is paid.
Provides the information required by law and the data used to compute the payroll.
Time worked is recorded manually by the employee or automatically by a time clock.
Where each day consists of one 24-hour period, instead of two 12-our periods.
Subject to taxation
Is a stated percentage of revenue paid to an employee who transacts a piece of business or performs a service.
Most employees are entitled to overtime pay under the Fair Labor Standards Act. They are called non-exempt employees. Employers must pay them one-and-a-half times their regular rate of pay when they work more than 40 hours in a week. The biggest problem most employers have with nonexempt employees is miscalculating how much overtime workers are owed.
The primary advantages of classifying employees as exempt are that you don’t have to track their hours or pay them overtime, no matter how many hours they work.
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