The Final Rule on Salaries
What exactly is salary? A salary is a sum of money paid annually to an individual, by an employer, for performing the duties assigned to him. It is compared with piece-work wages, in which every job, piece or other unit is paid usually not on a regular basis, and not individually. For instance, suppose you were a carpenter. You would receive a fixed salary for the job you had at the time, and you would be paid for a new car once you are finished.
On the other hand, some employers pay their employees for overtime and commissions instead of wages, and some employees simply do not earn any salaries at all. However, there are situations where an employee will receive a lump sum of money, either as salary, bonus, or profit sharing. Some employees also receive commissions on the sale of products created by their employers, while others receive commissions for the provision of services to outside customers. Some employers also pay employees for services performed outside the workplace, such as consulting and writing.
If an hourly employee is laid off, that person loses the right to receive a pension, sick pay, or any other kind of paid leave until a set period of time after the dismissal; during which he will be considered unemployed. The only source of income during this transitional period is the remaining wages that are still due to the employee by the end of the appointed period. Many countries have laws that prevent employees who are owed money by their employers from accepting a settlement until certain conditions are met. This includes being hospitalized or receiving extended leave. Many states also have laws that allow a salary employee to convert an hourly wage into a salaried wage if that employee has been working for the same employer for at least one year.
The concept of regular and equal wages was adopted in the United States by the National Minimum Wage Act of 1938. This act was designed to protect employees from becoming employed in employment that pays less than they are worth. The act established a minimum wage rate that must be followed by all employers with respect to the wages of their employees. It also set a maximum annual amount that can be paid to an employee above the federal minimum wage rate. The idea behind the National Minimum Wage Act was to prevent the disincentive effects of paying wages that were lower than that which was required by law. As a result, many employers have adopted the practice of paying employees according to their “real” or prevailing market wages.
In addition to the Fair Labor Standards Act, several states have their own laws that govern the amounts that can be paid for various kinds of services. In general, however, these laws require that salaries be set at a level that is a fair assessment of an individuals performance. Some examples of services that may be subject to a uniform minimum wage are overtime pay, tips, and the like. (abilia, books, etc., that are sold for actual value are not covered).
A few states, like California, do not have a law requiring that salaries be at a certain level. Instead, this varies by employer. For instance, in a private company with a large number of part-time and experienced workers, the employer is generally expected to set the level of final salary for his employees, based on their performance. A small business, like one run by one person, may have no requirement for final salaries and would only aspire to a higher standard of performance from its employees, so long as those employees meet the minimum wage requirement and perform adequately.