Power-Kunkle Group, Inc. - Employee & Executive Benefits in Reading, PA

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FAQ's

Introduction

An organization's compensation plan should be aligned with the strategic plan and culture of an organization. A carefully constructed compensation plan is competitive and rewards employees, fair and equitable, and most importantly, within the regulations of the Fair Labor Standards Act (FLSA) administered by the Federal Department of Labor. In addition to the federal regulations, every organization must research state laws that affect their business' compensation practices. A poorly constructed compensation program may leave the employer liable to costly litigation, low morale and high employee turnover. Successful organizations have recognized the opportunity to improve the return on their human resources investments by aligning pay plans with business strategies, which aids businesses in retaining top performers and attracting future talent to their organization while maintaining a competitive posture in the marketplace.

What is meant by the terms ‘non-exempt’ and ‘exempt’?

An employee is exempt from the overtime provisions of the Fair Labor Standards Act when they are classified as an executive, professional, administrative or outside sales employee, and meet the specific criteria for the exemption. In August of 2004, the Department of Labor made revisions to the FLSA that addresses exempt and non-exempt classifications including specifications for certain computer employees. Exempt employees generally must be paid at least $455 per week on a salary basis.

An employee who is not exempt from the overtime provisions of the Fair Labor Standards Act is covered by the compensation provisions of the FLSA. Such an individual is entitled to receive overtime for all hours worked beyond 40 in a workweek (as well as any state overtime provisions). Non-exempt employees may be paid on a salaried or hourly basis.

How do job descriptions fit into a compensation plan?

Job descriptions provide the basis for salary plans, job requirements, performance criteria and staffing strategies. Job descriptions are the foundation for building a fair and equitable compensation plan. Up to date job descriptions that reflect accurate performance related information can be used to support (and defend) an employer's human resources decisions. Job descriptions, at the minimum, should contain the following: a summary statement describing the overall purpose and objectives of the position, the essential and non essential functions of the job, the minimum competencies required for job performance and the minimum qualifications to perform the job. Other items such as supervisory responsibilities, working conditions and success factors may be included in job descriptions.