Example 2-17 Nancy Seigle earns a monthly salary of $3,100 for a 35-hour week. For overtime she receives her regular hourly rate of pay for the hours up to 40 and time and one-half beyond 40 hours in any week. For this semimonthly pay period, Seigle worked 8 hours overtime-only 1 hour was beyond 40 in any week, and she was paid $1,723.74 based on: $3,100 x 12 = $37,200 annual $37,200/52 $715.38/35 = $20.44 hourly $715.38 weekly $20.44 x 1.5 = $30.66 overtime $1,550.00 (semimonthly pay) + (7 x $20.44) + (1 $30.66) = $1,723.74 Sheila Williams, a medical secretary, earns $2,497 monthly for a 34-hour week. For overtime work, she receives extra pay at the regular hourly rate up to 40 hours and time and one-half beyond 40 hours in any week. During one semimonthly pay period, Williams worked 10 hours overtime. Only 2 hours of this overtime were beyond 40 hours in any one week. Compute the following amounts. Round all divisions to two decimal places and use the rounded amounts in subsequent computations. Round your final answers to the nearest cent. a. The regular semimonthly earnings $ b. The overtime earnings c. The total earnings Example 2-10 John Dilcher's is paid an hourly rate of $18.50 per hour, and he worked 49 hours this week. His pay would be calculated as follows: 49 hours x $18.50 = $906.50 9 hours x $9.25 ($18.50 x 0.5) = Total gross pay 83.25 overtime premium pay $989.75 Joseph Cavato is paid $10.08 per hour. During the past week, he worked 42 hours, and he is a covered employee who must be paid for overtime. Calculate his gross pay using the overtime premium approach. Round your overtime rate to two decimal places and use the rounded amount in subsequent computations. Round your final answers to the nearest cent. a. Regular pay (42 hours) b. Overtime premium pay $ c. Gross pay Example 2-25 Kate Kline receives an annual $35,000 base salary for working a certain territory. A sales quota of $800,000 has been set for that territory for the current year. Kline will receive a 6 percent commission on all sales in excess of $800,000. For the current year, the sales in the territory are $1,030,000. The bonus paid Kline would be: Kline's total earnings for the year would be: $13,800 (6% of $230,000) $48,800 ($35,000 + $13,800) Wendy Epstein, a sales representative, earns an annual salary of $31,600 and receives a commission on that portion of her annual sales that exceeds $150,000. The commission is 9.0% on all sales up to $50,000 above the quota. Beyond that amount, she receives a commission of 10.5%. Her total sales for the past year were $285,000. Compute the following amounts: a. The regular annual salary b. The commission c. The total annual earnings Example 2-23 Paul Fritz produced 3,073 pieces in a 44-hour workweek and is paid 184 cents for every unit produced. Step 1 Compute the total regular weekly earnings. Step 2 Compute the regular hourly rate of pay. Step 3 Compute the overtime rate of pay and compute the overtime earnings. The regular earnings include the pay for the overtime hours at the regular rate. This is for the extra one-half time. Step 4 3,073 x $0.1875 = $576.19 regular weekly earnings $576.19 44 hours = $13.10 regular hourly rate of pay = 0.5 x $13.10 $6.55 overtime rate of pay $26.20 overtime earnings 4 hours x $6.55 = Compute the total regular and overtime earnings for the week. $576.19 + $26.20 = $602.39 piecework and overtime earnings During the first week in November, Erin Mills worked 42.00 hours and produced 1,257 units under a piece-rate system. The regular piece rate is $0.34 a unit. Mills is paid overtime according to the FLSA ruling for overtime work under a piece-rate system. Compute the following amounts. Round all divisions to two decimal places and use the rounded amounts in subsequent computations. Round your final answers to the nearest cent. a. The piecework earnings b. The regular hourly rate The overtime hourly rate C. The overtime earnings d. The total earnings Paying Less Than the Minimum Wage Under certain conditions, wages lower than the minimum wage may be paid to some employees. 1. Tipped employees. 2. A training wage allows employers to pay $4.25 per hour to newly hired employees under 20 years of age (opportunity wage). This only applies to the first 90 consecutive calendar days of employment. 3. Retail or service establishments and farms may employ full-time students at 85 percent of the minimum wage ($6.1625 per hour, government rounds to $6.17 in favor of the employee). 4. Institutions of higher education may employ their own full-time students at 85 percent of the minimum wage. 5. Student-learners may be employed at 75 percent of the minimum wage if they are participating in a bona fide vocational training program conducted by an accredited school ($5.44 per hour). 6. Firms whose principal business is the delivery of letters and messages may employ messengers at not less than 95 percent of the minimum wage. 7. Persons whose earning capacity is impaired by age, physical or mental deficiency, or injury may be employed at special minimum wage rates. However, a certificate authorizing employment at such rates must first be obtained from the Department of Labor's Wage and Hour Division. Carson Beck has worked for 4 months at the local Worst Buy Shop. As a full-time student at the local university, he is being paid an hourly rate of $4.55 an hour. One week, Beck worked 39 hours. Round your answers to the nearest cent. a. Beck's earnings for the week are b. Is the hourly rate in violation of the FLSA? c. If the hourly rate is in violation of the FLSA, what is the amount the shop should pay Beck for the week? When computing the per hour rate, use the government's rounding rule in your calculation. Example 2-25 Kate Kline receives an annual $35,000 base salary for working a certain territory. A sales quota of $800,000 has been set for that territory for the current year. Kline will receive a 6 percent commission on all sales in excess of $800,000. For the current year, the sales in the territory are $1,030,000. The bonus paid Kline would be: Kline's total earnings for the year would be: $13,800 (6% of $230,000) $48,800 ($35,000 + $13,800) Jill Connor is employed as a salesperson in the men's department of Fashion Line. In addition to her weekly base salary of $355, Connor is paid a commission of 1% on her total net sales for the week (total gross sales less any customer returns). During the past week, to promote the sale of its fine cashmere sweaters, Fashion Line agreed to pay Connor an additional PM (push money) of 1% of the total net sales of cashmere sweaters. Connor's weekly sales tally is given below. Item Gross Sales Customer Returns Regular sweaters $410 $47 Cashmere sweaters 997 74 Ties 191 0 Dress shirts Sports shirts 458 192 45 24 Compute Connor's total weekly earnings, showing her (a) weekly base salary, (b) commission, (c) PM, and (d) total weekly earnings. Round your intermediate and final answers to the nearest cent. a. Weekly base salary: Weekly gross sales Less customer returns Weekly net sales b. Commission: $ 1% Weekly gross sales of cashmere sweaters Less customer returns Weekly net sales of cashmere sweaters c. Push money (PM): $ 1% d. Total weekly earnings FIGURE 2.3 Time Card No. 312 Pay Ending October 17, 20- NAME GARY A. SCHNEIDER Hours Rate Amount 000-00-7471 OASDI 32 66 Reg 40 10.75 43000 HI 616.13 96 78 FIT 764 63.00 SIT 10 54 Group Life Ins. 160 Hospital Ins. 315 Total Earnings 526 78 U.S. Sav. Bonds 500 Less Deductions 123 59 Oner NET PAY 40319 Total MORNING AFTERNOON Days IN OUT IN OUT IN 1 759 1203100505 22750120412592507 12359 OVERTIME Daily OUT Totals 8 8 3 751 120 1250 504 529 735 10 480012021258 503 5800 1205 101 500 6755 1204 7 8 8 4 Signature Gary A. Schneider Potts, Inc., recently converted from a 5-day, 40-hour workweek to a 4-day, 40-hour workweek, with overtime continuing to be paid at one and one-half times the regular hourly rate for all hours worked beyond 40 in the week. In this company, time is recorded under the continental system, as shown on the time card below. Sue Ellen Boggs is part of the Group B employees whose regular workweek is Tuesday through Friday. The working hours each day are 800 to 1200; 1230 to 1630; and 1800 to 2000. The company disregards any time before 800, between 1200 and 1230, and between 1630 and 1800, and permits employees to ring in up to 10 minutes late before any deduction is made for tardiness. Deductions are made to the nearest 1/4 of an hour for workers who are more than 10 minutes late in ringing in. No. 160 Hr. Rate $9.65 Name Sue Ellen Boggs O.T. Rate $14.475 Time Mon Tues Wed Thurs Fri Sat Evening Morning Afternoon Out In Out In Out 2002 2001 2005 2000 1801 1809 1802 1800 1630 1631 1630 1635 1230 1231 1230 1238 1200 1202 1200 1203 1201 Total for UT 5 755 750 813 759 800 Week Daily (a) (b) Totals Remarks 13 minutes late Thursday - deduct 1 hr. Refer to the time card and compute the following: a. The daily total hours. Enter any fraction of an hour as a decimal. For example 24 hours would be entered as 2.25. Tuesday Wednesday Thursday Friday Saturday hours hours hours hours hours Note: For (b)-(e), round hours and earnings to two decimal places. b. The total hours for the week. hours c. The regular weekly earnings. d. The overtime earnings (company rounds O.T. rate to 3 decimal places). e. The total weekly earnings