What is an exempt employee? According to the Fair Labor Standards Act (FLSA), exempt employees are paid a set monthly or annual salary instead of hourly pay. This means that these employees may work as much or as little as they need to fulfill the duties of their position. They’re typically salaried employees. They are not…
What is PTO accrual? PTO accrual, or paid time off accrual, governs how time off balances are accumulated over the course of employment. Paid time off can include vacation time, sick leave, personal days, or other types of paid time off offered by the employer. Once an employee has earned paid time off, they can…
What is a salaried employee? A salaried employee is an individual who is hired to handle a particular job and is paid a fixed amount of money, regardless of the hours they work per week. The standard working hours are 40 hours per week, which means a salaried employee receives the agreed-upon salary even if…
What is supplemental pay? Supplemental pay is payments made to employees in addition to their normal pay. Supplemental wages are given outside the regular wages and include bonuses, commissions, overtime pay, severance package, sick leave payments, awards, and tips. The additional pay isn’t part of an employee’s regular salary, and it plays a key incentive…
What are pre-tax deductions? Pre-tax deductions are any amount of money subtracted from an employee’s gross wages before taxes are withheld. Since these deductions are withheld before the wages are taxed, they lower the taxable income and any money an employee might owe to the government. It may also reduce taxes under the Federal Insurance…
What is FLSA status? The Fair Labour Standards Act (FLSA) is the federal regulation for employee working hours and pay standards. It determines the exempt or non-exempt status of jobs and overtime requirements. An employee’s FLSA status describes whether that employee is classified as exempt or non-exempt. What is an exempt employee? An exempt employee…
What is paid time off (PTO)? Paid time off, commonly abbreviated as PTO, is the time employees take off work while receiving regular payments. It does not include times when the employee is telecommuting or working remotely. Typically, PTO policies will combine personal, sick, and holiday days. Companies structure their paid time off policies depending…
What is holiday pay? Holiday pay is a voluntary benefit or compensation that an employer offers employees during holidays, such as Christmas, Labor Day, or Thanksgiving. Holiday pay can take many forms. For instance, some employers offer fully or partially paid time off during holidays. While some businesses have the luxury of closing during holidays,…
What is net pay? Commonly known as take-home pay, net pay is the income employees receive after employers remove withholdings and payroll deductions from their salary or wage. For instance, if an employee makes $9,000 per month and has $2,000 deducted for benefits and taxes, that worker’s net pay would be $7,000. These deductions can…
What are fringe benefits? Fringe benefits refer to any form of long-term incentives or non-monetary compensation an employer offers employees. Such benefits exclude cash compensation like salaries and bonuses. Fringe benefits can often apply universally to all employees; in other cases, they are specific to a group of staff, especially at the team and executive…