Question

Terry Masonry is a small company that employs both part and full-time employees and exclusively uses a manual payroll system. Employees can elect to purchase health insurance on their own using employer compensation or can choose the company's no cost health insurance. The company recently hired a few on-call employees. The on-call employees determine where they work, as well as how many hours they work. A year ago, the company was accused of unequal pay practices.

1. Using the Fair Labor Standard Act (FLSA) as a guide, what should the company consider concerning working hours?

2. Joe Smith was terminated from Terry Masonry and while employed he choose to receive employer compensation to purchase his own health insurance. In this situation, how should COBRA be administered?

3. Terry Masonry's Chief Financial Officer (CFO) wants to update the payroll system. The company owner requests that the CFO conduct research and provide a report with available options. If you were the CFO, what would you report to the owner?

4. The company's accounting manager is having trouble determining the employment status for oncall employees? What criteria should the accounting manager to use to make this determination? Please provide a minimum of two criteria.

Answer 1

1) As per Fair Labor Standard Set guide, Right to minimum wage and time and a half overtime pay when people work over 40 hours a week. If not paying on call, violates FLSA hours worked and overtime rules. FLSA do not provides different views for part time and full time employment. If the requirement is to be of On call their on call time might be hours worked depending on location and freedom.

2) For COBRA coverage; Consolidated Omnibus Budget Reconciliation Act must elect it within 60 days of their insurance termination date and gives some employees ability to continue Health Insurance after leaving employees. But as per COBRA coverage; Joe Smith or other beneficiary (spouse or dependant children) has to pay full premium at the employer negotiated rate.

3) As a CFO for updating payroll system consists of calculating wages, withholding taxes and deduction, printing ad delivering cheques, direct deposits, paying premium, paying taxes. The data which will be included as a CFO report will be:

* Changing from manual to electronic: While changing it for few weeks/ months both manual and electronic payroll processing simultaneously.

* Automatic Alerts of Error: If someone inputs an incorrect dollar or incorrect hours alert arises automatically.

* Embrace Diverse Salary Structure: Different salary structures can be created for easy handling of payroll. Incase of overtime included or insurances paid or taxes deducted etc such type of diverse salary structure to be maintained.

* Straight forward statutory compliance: Statutory compliance like gratuity, employee provident fund, super annuation fund, employee insurances, taxes all such compliances can improve payroll system and avoid unequal payscale.

4) As a Accounts manager, the criteria for determining employment status whether employee is on call employee or regular will depend on few criteria. Such as

* How the employee is being remunerated? And their payment must be automated via bank transaction. So that easily their employment status can be known.

* Level of Control an employer has with the employee. Relationship can be known by checking whether employees pay their own insurance and tax amount. Whether employee is given all the allowances that of regular employees.

* Contract made between employer and employee helps in can help in knowing employment status. The agreement terms between the two can also help in deciding employment status.