Compensating an employee is not simply a process of settling upon a mutually agreeable salary. There are a number of regulations and reporting requirements that need to be met. Here is some information a variety of issues surrounding compensation that you need to be aware of.
Competitive Wages
When deciding pay rates for skilled workers, it may be helpful to keep tabs on the going
rates for your industry and area. The U.S. Department of Labor's Bureau of Labor Statistics
Web site maintains a comprehensive list of
median and mean salaries across the
United States by occupation, industry and area of the United States.
Minimum Wage Requirements
The Fair Labor Standards Act (FLSA) establishes current minimum wage requirements for
employees. Exceptions include lower wages for employees under 20 years of age for a defined
period of time, certain full-time students, apprentices, interns and workers with
disabilities. Many states
also have minimum wage laws. In cases where an employee is subject to both the state and
federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
Overtime Wages
The rate for all hours worked over a 40 hour workweek are at least 1 1/2 times an
employee's regular rate of pay. Some exceptions to overtime pay include administrative or
executive employees, which fall under the "white collar exemption," as well as outside
sales employees.
Child Support Enforcement
Every U.S. employer, large and small, must comply with state and federal laws
pertaining to child support enforcement. The three principal requirements include:
You must report all newly hired employees to your State Directory of New Hires.
When you receive a valid Order or Notice to Withhold Income for Child Support for an employee, you must follow the terms of the Order/Notice and deduct the specified amount from each paycheck within the allowable limits. This amount must then be remitted within designated timeframes.
You must provide information to the state or local child support enforcement agency for information about an employee, such as information about his or her earnings, current residence, and health insurance coverage, and report the termination of an employee for whom you are withholding child support (whether the employee is fired, resigns or is temporarily laid off).
Wage Garnishment
Wage garnishment occurs when an employer withholds the earnings of an individual for
the payment of a debt as the result of a court order or other equitable procedure. Learn
about employers' responsibilities and employees' rights.
Student Loan
Garnishment Actions
Section 488A of the Higher Education Act authorizes the U.S. Department of Education
and student loan guarantors to collect defaulted federally-financed student loans
by means of an administrative garnishment order to the former student's employer,
without the need for a court order.
Employee Benefit Plans
The Employee Retirement Income Security Act (ERISA) sets uniform minimum
standards required by federal law to ensure that employee benefit plans are
established and maintained in a fair and financially sound manner.
Workers' Compensation Programs
Learn the ins and outs of general federal and state workers' compensation rules, or
look up specialized programs to aid coal miners, longshoremen and workers from other industries.
