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A salary is a form of periodic payment from an employer to an employee, which may be specified in an
employment contract An employment contract or contract of employment is a kind of contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', ...
. It is contrasted with piece
wage A wage is the distribution from an employer of a ''security'' (expected return or profits derived solely from others) paid to an employee. Like interest is paid out to an investor on his investments, a wage is paid (from company earnings) to t ...

wage
s, where each job, hour or other unit is paid separately, rather than on a periodic basis. From the point of view of running a business, salary can also be viewed as the cost of acquiring and retaining human resources for running operations, and is then termed personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts. Salary is a fixed amount of money or compensation paid to an employee by an employer in return for work performed. Salary is commonly paid in fixed intervals, for example, monthly payments of one-twelfth of the annual salary. Salary is typically determined by comparing market pay rates for people performing similar work in similar industries in the same region. Salary is also determined by leveling the pay rates and salary ranges established by an individual employer. Salary is also affected by the number of people available to perform the specific job in the employer's employment locale.


History


First paid salary

While there is no first
pay stub A paycheck, also spelled pay check or pay cheque, is traditionally a paper document (a cheque A cheque, or check (American English; American and British English spelling differences, see spelling differences), is a document that orders ...

pay stub
for the first work-for-pay exchange, the first salaried work would have required a society advanced enough to have a
barter In trade, barter (derived from ''baretor'') is a system of exchange (economics), exchange in which participants in a financial transaction, transaction directly exchange good (economics), goods or service (economics), services for other goods or ...
system which allowed for the even exchange of goods or services between tradesmen. More significantly, it presupposes the existence of organized employers—perhaps a government or a religious body—that would facilitate work-for-hire exchanges on a regular enough basis to constitute salaried work. From this, most infer that the first salary would have been paid in a
village A village is a clustered human settlement In geography Geography (from Greek: , ''geographia'', literally "earth description") is a field of science devoted to the study of the lands, features, inhabitants, and phenomena ...

village
or
city A city is a large human settlement.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Penguin.Kuper, A. and Kuper, J., eds (1996) ''The Social Science Encyclopedia''. 2nd edition. London: Routledge. It can be defined as a ...
during the
Neolithic Revolution The Neolithic Revolution, or the (First) Agricultural Revolution, was the wide-scale transition of many human culture Culture () is an umbrella term which encompasses the social behavior Social behavior is behavior Behavior (Ameri ...
, sometime between 10,000 BCE and 6000 BCE. A
cuneiform Cuneiform is a Logogram, logo-Syllabary, syllabic writing system, script that was used to write several languages of the Ancient Near East. The script was in active use from the early Bronze Age until the beginning of the Common Era. It is nam ...

cuneiform
inscribed clay tablet dated about 3100 BCE provides a record of the daily
beer Beer is one of the oldest and most widely consumed alcoholic drinks in the world, and the third most popular drink overall after water and tea. Beer is brewing, brewed from cereal, cereal grains—most commonly from malted barley, though wh ...

beer
rations for workers in
Mesopotamia Mesopotamia ( grc, Μεσοποταμία ''Mesopotamíā''; ar, بِلَاد ٱلرَّافِدَيْن ; syc, ܐܪܡ ܢܗܪ̈ܝܢ, or , ) is a historical region of Western Asia situated within the Tigris–Euphrates river system, in the ...

Mesopotamia
. The beer is represented by an upright jar with a pointed base. The symbol for rations is a human head eating from a bowl. Round and semicircular impressions represent the measurements. By the time of the Hebrew
Book of Ezra The Book of Ezra is a book of the Hebrew Bible; which formerly included the Book of Nehemiah in a single book, commonly distinguished in scholarship as Ezra–Nehemiah. The two became separated with the first printed Mikraot Gedolot, rabbinic bi ...
(550 to 450 BCE),
salt Salt is a mineral In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fairly well-defined chemical composition and a specific crystal structure that occurs naturally in pure fo ...

salt
from a person was synonymous with drawing sustenance, taking pay, or being in that person's service. At that time, salt production was strictly controlled by the
monarch A monarch is a head of state A head of state (or chief of state) is the public persona A persona (plural personae or personas), depending on the context, can refer to either the public image of one's personality, or the social role tha ...

monarch
y or ruling elite. Depending on the translation o
Ezra 4:14
the servants of King
Artaxerxes I Artaxerxes I (, peo, 𐎠𐎼𐎫𐎧𐏁𐏂 , "whose rule (''xšaça'' PlutarchThemistocles, 29/ref> Portrayal in the Book of Ezra and Nehemiah A King Artaxerxes ( he, אַרְתַּחְשַׁשְׂתְּא, ) is described in the Bible ...

Artaxerxes I
of
Persia Iran ( fa, ایران ), also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. It is bordered to the northwest by Armenia and Azerbaijan, to the north by the Caspian Sea, to the northeast by Tu ...
explain their loyalty variously as "because we are salted with the salt of the palace" or "because we have maintenance from the king" or "because we are responsible to the king".


''Salarium''

Similarly, the Latin word ''salarium'' linked employment, salt, and soldiers, but the exact link is not very clear. More modern sources maintain instead that although Roman soldiers were typically paid in coin, the word ''salarium'' is derived from the word ''sal'' (salt) because at some point a soldier's salary may have been an allowance for the purchase of salt or the price of having soldiers conquer salt supplies and guard the Salt Roads (''Via Salaria'') that led to Rome. However, there is no ancient evidence for either of these hypotheses. Some people even claim that the word
soldier A soldier is a person who is a member of a professional army An army (from Latin ''arma'' "arms, weapons" via Old French ''armée'', "armed" eminine, ground force or land force is a fighting force that fights primarily on land. In the ...

soldier
itself comes from the Latin ''sal dare'' (to give salt), but mainstream sources disagree, noting that the word ''soldier'' more likely derives from the gold solidus, with which soldiers were known to have been paid.


Roman empire and medieval and pre-industrial Europe

Regardless of the exact connection, the ''salarium'' paid to Roman soldiers has defined a form of work-for-hire ever since in the
Western world The Western world, also known as the West, refers to various regions, nations and state (polity), states, depending on the context, most often consisting of the majority of Europe, Northern America, and Australasia.
, and gave rise to such expressions as "being worth one's salt". Within the
Roman Empire The Roman Empire ( la, Imperium Rōmānum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post-Republican Republican can refer to: Political ideology * An advocate of a republic, a type of governme ...

Roman Empire
or (later)
medieval In the history of Europe The history of Europe concerns itself with the discovery and collection, the study, organization and presentation and the interpretation of past events and affairs of the people of Europe since the beginning of ...

medieval
and
pre-industrial Pre-industrial society refers to social attributes and forms of political and cultural organization that were prevalent before the advent of the Industrial Revolution The Industrial Revolution was the transition to new manufacturing process ...
Europe Europe is a continent A continent is any of several large landmasses. Generally identified by convention (norm), convention rather than any strict criteria, up to seven geographical regions are commonly regarded as continents. Ordered ...

Europe
and its
mercantile Trade involves the transfer of goods or services from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of Interaction, interacting or interrelated elements that act according to ...

mercantile
colonies, salaried employment appears to have been relatively rare and mostly limited to servants and higher status roles, especially in government service. Such roles were largely remunerated by the provision of lodging, food, and
livery A livery is a uniform, insignia or symbol adorning, in a non-military context, a person, an object or a vehicle that denotes a relationship between the wearer of the livery and an individual or corporate body. Often, elements of the heraldry He ...
clothes (i.e., "food, clothing, and shelter" in modern idiom). Many courtiers, such as
valets de chambre ''Valet de chambre'' (), or ''varlet de chambre'', was a noble court, court appointment introduced in the late Middle Ages, common from the 14th century onwards. Royal households had many persons appointed at any time. While some valets simply ...
, in late medieval courts were paid annual amounts, sometimes supplemented by large if unpredictable extra payments. At the other end of the social scale, those in many forms of employment either received no pay, as with
slavery Slavery and enslavement are both the state and the condition of being a slave, who is someone forbidden to quit their service for an enslaver, and who is treated by the enslaver as their property. Slavery typically involves the enslaved per ...
(although many slaves were paid some money at least),
serfdom Serfdom was the status of many peasant A peasant is a pre-industrial farmhand, agricultural laborer or a farmer with limited land-ownership, especially one living in the Middle Ages under feudalism and tenant farmer, paying rent, tax, fee ...
, and
indentured servitude Indentured servitude is a form of forced labor in which a person (an indenture) is forced to work without salary for a specific number of years for eventual compensation or debt repayment. Historically, it has been used to punish and relocate cap ...
, or received only a fraction of what was produced, as with
sharecropping Sharecropping is a legal arrangement with regard to agricultural land in which a landowner allows a tenant to use the land in return for a share of the crops produced on that land. Sharecropping has a long history and there are a wide range ...
. Other common alternative models of work included self- or co-operative employment, as with masters in
artisan Wood carver in Bali An artisan (from french: artisan, it, artigiano) is a skilled craft worker who makes or creates material objects partly or entirely by hand. These objects may be functional or strictly decorative, for example fur ...

artisan
guild A guild is an association of artisan Wood carver in Bali An artisan (from french: artisan, it, artigiano) is a skilled craft worker who makes or creates material objects partly or entirely by hand. These objects may be functiona ...
s, who often had salaried assistants, or corporate work and ownership, as with
medieval universities A medieval university was a Corporation#History, corporation organized during the Middle Ages In the history of Europe, the Middle Ages or medieval period lasted approximately from the 5th to the late 15th centuries, similarly to th ...
and
monasteries A monastery is a building or complex of buildings comprising the domestic quarters and workplaces of monastics, monk A monk (, from el, μοναχός, ''monachos'', "single, solitary" via Latin Latin (, or , ) is a classical langua ...

monasteries
.


Commercial Revolution

Even many of the jobs initially created by the
Commercial Revolution The Commercial Revolution consisted of the creation of a European economy based on trade, which began in the 11th century and lasted until it was succeeded by the Industrial Revolution in the mid-18th century. Beginning with the Crusades, Europeans ...
in the years from 1520 to 1650 and later during
Industrialisation Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society An agrarian society, or agricultural society, is any community whose economy is b ...

Industrialisation
in the 18th and 19th centuries would not have been salaried, but, to the extent they were paid as employees, probably paid an hourly or daily
wage A wage is the distribution from an employer of a ''security'' (expected return or profits derived solely from others) paid to an employee. Like interest is paid out to an investor on his investments, a wage is paid (from company earnings) to t ...

wage
or paid per unit produced (also called
piece work Piece work (or piecework) is any type of employment Employment is the relationship between two parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview; cropped away ...

piece work
).


Share in earnings

In
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
s of this time, such as the several East India Companies, many managers would have been remunerated as owner-
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a Trust law, trust or partnership) that is registered by the corporation as the ...
s. Such a
remuneration Remuneration is the pay or other financial compensationFinancial compensation refers to the act of providing a person with money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King Georg ...

remuneration
scheme is still common today in
accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to compare with other ob ...
, investment, and
law firm A law firm is a business entity formed by one or more lawyers A lawyer or attorney is a person who practices law, as an advocate, attorney at lawAttorney at law or attorney-at-law, usually abbreviated in everyday speech to attorney, is the ...
partnership A partnership is an arrangement where parties, known as business partner A business partner is a commercial entity with which another commercial entity has some form of Business alliance, alliance. This relationship may be a contractual, exclus ...

partnership
s where the leading
profession A Profession is a disciplined group of individuals who adhere to ethical standards and who hold themselves out as, and are accepted by the public as possessing special knowledge and skills in a widely recognised body of learning derived from re ...

profession
als are
equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the differe ...
partners, and do not technically receive a salary, but rather make a periodic "draw" against their share of annual earnings.


Second Industrial Revolution

From 1870 to 1930, the
Second Industrial Revolution The Second Industrial Revolution, also known as the Technological Revolution, was a phase of rapid and from the late 19th century into the early 20th century. The , which ended in the middle of the 19th century, was punctuated by a slowdow ...
gave rise to the modern business
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
powered by railroads, electricity and the telegraph and telephone. This era saw the widespread emergence of a class of salaried executives and administrators who served the new, large-
scale Scale or scales may refer to: Mathematics * Scale (descriptive set theory)In the mathematical discipline of descriptive set theory, a scale is a certain kind of object defined on a set (mathematics), set of point (mathematics), points in some Poli ...

scale
enterprises being created. New
managerial Management (or managing) is the administration of an organization An organization, or organisation (Commonwealth English The use of the English language English is a West Germanic languages, West Germanic language first spok ...
jobs lent themselves to salaried employment, in part because the effort and output of "
office An office is a space where an Organization, organization's employees perform Business administration, administrative Work (human activity), work in order to support and realize objects and Goals, plans, action theory, goals of the organizatio ...

office
work" were hard to measure hourly or piecewise, and in part because they did not necessarily draw remuneration from
share Share may refer to: * Share, to make joint use of a resource (such as food, money, or space); see Sharing * Share (finance), a stock or other financial security (such as a mutual fund) * Share, Kwara, a town and LGA in Kwara State, Nigeria Share ma ...
ownership. As Japan rapidly industrialized in the 20th century, the idea of office work was novel enough that a new Japanese word (
salaryman The term refers to any salaried worker. In Japanese popular culture, this is embodied by a white-collar worker A white-collar worker is a person who performs professional, desk, managerial, or administrative work. White-collar work may be pe ...
) was coined to describe those who performed it, as well as referencing their remuneration.


20th century

In the 20th century, the rise of the
service economy Service economy can refer to one or both of two recent economic developments: * The increased importance of the service sector The tertiary sector of the economy, generally known as the service sector, is the third of the three economic secto ...
made salaried employment even more common in
developed countries A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state A sovereign state is a political entity that is represented by one centralized governmen ...
, where the relative share of industrial production jobs declined, and the share of executive, administrative, computer,
marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of adv ...

marketing
, and creative jobs—all of which tended to be salaried—increased.


Salary and other forms of payment today

Today, the concept of a salary continues to evolve as part of a system of the total compensation that employers offer to employees. Salary (also now known as fixed pay) is coming to be seen as part of a "total rewards" system which includes bonuses, incentive pay, commissions, (or perks), and various other tools which help employers link rewards to an employee's measured performance. Compensation has evolved considerably. Consider the change from the days of and before the industrial evolution, when a job was held for a lifetime, to the fact that, from 1978 to 2008, individuals who aged from 18 to 44, held an average number of 11 jobs. Compensation has evolved gradually moving away from fixed short-term immediate compensation towards fixed + variable outcomes-based compensation. An increase in knowledge-based work has also led to pursuit of partner (as opposed to employee) like engagement.


By country


Botswana

In
Botswana Botswana (, also ), officially the Republic of Botswana ( tn, Lefatshe la Botswana, label=Setswana; Kalanga language, Kalanga: ''Hango yeBotswana''), is a landlocked country in Southern Africa. Botswana is topographically flat, with up to 70 ...

Botswana
, salaries are almost entirely paid on a monthly basis with pay dates falling on different dates of the second half of the month. Pay day usually ranges from the 15th of the month to the last day. The date of disbursement of the salary is usually determined by the company and in some cases in conjunction with the recognized Workers Union. The Botswana Employment Act Cap 47:01 Chapter VII regulates the aspect of protection of wages in the contracts of employment. The minimum and maximum wage payment period with the exception of casual employees should not be less than one week or more than a month, and where not expressly stipulated a month is the default wage period per section 75 of the Act payable before the third working day after the wage period. The wages are to be paid during working hours at the place of employment, or in any other way, such as through a bank account with the consent of the employee. Salaries should be made in legal tender, however, part payment in kind is not prohibited provided it is appropriate for the personal use and benefit of employee and his family, and the value attributable to such payment in kind is fair and reasonable. The payment in kind should not exceed forty per cent of the total amount paid out to the employee. The minimum wage is set, adjusted and can even be abolished by the Minister on the advice of the Minimum Wages Advisory Board for specified trade categories. The stipulated categories include building, construction, hotel, catering, wholesale, watchmen, the domestic service sector, the agricultural sector etc. The current minimum wages set for these sectors are set out in the Subsidiary legislation in the Act. Women on maternity leave are entitled to 25% of their salaries as stipulated by the Employment Act but the majority of the companies pay out at about 50% for the period.


Denmark

By working for the Danish Government, it has been agreed under political agreements, that the salary is dependent on the seniority, education, and of a qualification allowance.


European Union

According to European law, the movement of capital, services and (human) resources is unlimited between member states. Salary determination, such as minimum wage, is still the prerogative of each member state. Other social benefits, associated with salaries are also determined on member-state level.


India

In India, salaries are generally paid on the last working day of the month (Government, Public sector departments, Multi-national organisations as well as majority of other private sector companies). According to the Payment of Wages Act, if a company has less than 1,000 Employees, salary is paid by the 7th of every month. If a company has more than 1,000 Employees, salary is paid by the 10th of every month. Minimum wages in India are governed by the Minimum Wages Act, 1948. Employees in India are notified of their salary being increased through a hard copy letter given to them.


Italy

In
Italy Italy ( it, Italia ), officially the Italian Republic ( it, Repubblica Italiana, links=no ), is a country consisting of Italian Peninsula, a peninsula delimited by the Alps and List of islands of Italy, several islands surrounding it, whose ...

Italy
, the
Constitution A constitution is an aggregate of fundamental principles A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a rule Rule or ruling may refer to: Human activity * The exercise of political ...
guarantees a
minimum wage A minimum wage is the lowest remuneration Remuneration is the pay or other financial compensationFinancial compensation refers to the act of providing a person with money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, ...
, as stated in Article 36, Paragraph 1 :"Workers have the right to a remuneration commensurate to the quantity and quality of their work and in any case such as to ensure them and their families a free and dignified existence." This constitutional guarantee is implemented not through a specific legislation, but rather through
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The int ...
which sets minimum wage standards in a sector by sector basis. Collective bargaining is protected by
trade unions A trade union (or a labor union in American English), often simply referred to as a union, is an organization of workers who have come together to achieve common goals, such as protecting the integrity of their trade, improving safety standards ...
, which have constitutional rights such as
legal personality In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its b ...
. The Constitution also guarantees
equal pay for women Equal pay for equal work is the concept of labour rights Labor rights or workers' rights are both legal rights and human rights Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, an ...
, as stated in Article 37, Paragraph 1 :"Working women are entitled to equal rights and, for comparable jobs, equal pay as men."


Japan

In Japan, owners would notify employees of salary increases through "jirei". The concept still exists and has been replaced with an electronic form, or E-mail in larger companies. The position and world of "salarymen" is open to only one third of Japanese men. From school age these young potentials are groomed and pre-selected to one day join a company as a "salaryman". The selection process is rigorous and thereafter the process initiation speaks of total dedication to the company.


South Africa

Minimum wages are used widely in developing countries to protect vulnerable workers, reduce wage inequality, and lift the working poor out of poverty. The political popularity of minimum wages stems in part from the fact that the policy offers a means for redistributing income without having to increase government spending or establish formal transfer mechanisms. The challenge to policymakers is to find that wage level that is considered fair given workers' needs and the cost of living, but does not harm employment or a country's global competitiveness. South African median employee earning is R2800 a month (USD ) and the average earning is around R8500. These figures are found in SA statistics. Indeed, they reflect the huge gap in the South African society with a large proportion of the population under poverty line that does not have the same opportunities for employment. Median monthly earnings of white (R9500) and Indian/Asian (R6000) population were substantially higher than the median monthly earnings of their coloured (R2652) and black African (R2167) counterparts. Black Africans earned 22,% of what the white population earned; 36,1% of what Indians/Asians earned; and 81,7% of what the coloured population earned. In the bottom 5%, black Africans earned R500 or less per month while the white population earned R2 000 or less, while in the top 5% they earned R12 567 or more compared to the white population who earned R34000 or more per month.


The Netherlands

In the Netherlands the salary which occurs most frequently is referred to as Jan Modaal. The term "modaal" is derived from the statistical term Modus. If the government's macro economic policy negatively affects this "Modaal" income or salary-group often the policy is adjusted in order to protect this group of income earners. The Dutch word "soldij" can be directly linked to the word "soldaat" or soldier, which finds its origin in the word for the gold coin
solidus Solidus (Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the Roman Republi ...
, with which soldiers were paid during the Roman Empire. The Netherlands is in the top 5 of the highest salary-paying countries in the EU. The focus has been on the salary levels and accompanying bonuses whereas secondary benefits, though present, has been downplayed yet that is changing. The Netherlands claims a 36th position when it comes to secondary benefits when compared to other countries in Europe. The minimum wage is determined through collective labor negotiations (CAOs). The minimum wage is age dependent; the legal minimum wage for a 16-year-old is lower than, for instance, a 23-year-old (full minimum wage). Adjustments to the minimum wage are made twice a year; on January 1 and on July 1. The minimum wage for a 21-year-old on January 1, 2013 is 1,065.30 Euro netto per month and on July 1, 2013 this minimum wage is 1,071.40 Euro netto per month. For a 23 year old on 1 January 2014 is 1485,60 Euro gross salary / month plus 8% holiday subsidy so 1604,45 Euro gross salary / month


United States

In the United States, the distinction between periodic salaries (which are normally paid regardless of hours worked) and hourly wages (meeting a
minimum wage A minimum wage is the lowest remuneration Remuneration is the pay or other financial compensationFinancial compensation refers to the act of providing a person with money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, ...
test and providing for
overtime Overtime is the amount of time someone works beyond normal . The term is also used for the pay received for this time. Normal hours may be determined in several ways: *by custom (what is considered healthy or reasonable by society), *by practice ...
) was first codified by the
Fair Labor Standards Act The Fair Labor Standards Act of 1938 (FLSA) is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits employment of Minor (law), mino ...
of 1938. At that time, five categories were identified as being "exempt" from minimum wage and overtime protections, and therefore salariable. In 1991, some computer workers were added as a sixth category but effective August 23, 2004 the categories were revised and reduced back down to five (executive, administrative, professional, computer, and outside sales employees). In June 2015 the Department of Labor proposed raising "the salary threshold from $455 a week (the equivalent of $23,660 a year) to about $970 a week ($50,440 a year) in 2016" On May 18, 2016 the Final rule updating the overtime regulations was announced. Effective December 1, 2016 it says: "The Final Rule sets the standard salary level at the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week, equivalent to $47,476 per year for a full-year worker)." "The Final Rule sets the HCE total annual compensation level equal to the 90th percentile of earnings of full-time salaried workers nationally ($134,004 annually). To be exempt as an HCE, an employee must also receive at least the new standard salary amount of $913 per week on a salary or fee basis and pass a minimal duties test." "Although the FLSA ensures minimum wage and overtime pay protections for most employees covered by the Act, some workers, including bona fide EAP employees, are exempt from those protections. Since 1940, the Department’s regulations have generally required each of three tests to be met for the FLSA’s EAP exemption to apply: # the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (“salary basis test”); # the amount of salary paid must meet a minimum specified amount (“salary level test”); and # the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”). " "The Final Rule includes a mechanism to automatically update the standard salary level requirement every three years to ensure that it remains a meaningful test for distinguishing between overtime-protected white collar workers and bona fide EAP workers who may not be entitled to overtime pay and to provide predictability and more graduated salary changes for employers. Specifically, the standard salary level will be updated to maintain a threshold equal to the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region." "For the first time, employers will be able to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level. Such payments may include, for example, nondiscretionary incentive bonuses tied to productivity and profitability." A general rule for comparing periodic salaries to hourly wages is based on a standard 40-hour work week with 50 weeks per year (minus two weeks for vacation). (Example: $40,000/year periodic salary divided by 50 weeks equals $800/week. Divide $800/week by 40 standard hours equals $20/hour).


Zimbabwe

Zimbabwe operates on a two tier system being wages and salaries. Wages are managed by the National Employment Council (NEC). Each sector has its own NEC; i.e. agriculture, communications, mining, catering, educational institutions, etc. On the council are representatives from the unions and the employers. The public sector is under the Public Service Commission and wages and salaries are negotiated there. Wages are negotiated annually or biennially for minimum wages, basic working conditions and remunerations. If there is a stalemate it goes for arbitration with the Ministry of labour. The ruling will become binding on all companies in that industry. Industries often then use their associations to negotiate and air their views. For example, the mining industry nominates an employee within the chamber of mines to attend all meetings and subcommittee with industry players is a forum for discussions. Salaries are negotiated by the respective employees. However, NEC obviously affects the relativity and almost acts as a barometer for salaried staff. Salaries and wages in Zimbabwe are normally paid monthly. Most companies' pay around the 20th does allow various statutory payments and processing for the month end. Government employees are also staggered to ease the cash flow though teachers are paid around mid-month being 16th. Agricultural workers are normally paid on the very last day of the month as they are contract employees. Zimbabwe is a highly banked society with most salaries being banked. All government employees are paid through the bank. Since "dollarisation" (movement from the Zimbabwean dollar to USD) Zimbabwe has been moving toward a more informal sector and these are paid in 'brown envelopes'. PAYE (Pay As You Earn) is a significant contributor to tax being 45%. Given the high unemployment rate the tax is quite heavy. This of course captures those that pay and keep records properly. The average salary is probably $250. This is skewed downwards by the large number of government employees whose average salary is around there. At the top end salaries are quite competitive and this is to be able to attract the right skills though the cost of living is high so it balances this out. A top-earning Zimbabwean spends a lot more money on necessities than say a South African top earner. This is more evident when a comparison with USA or England is done. The need to have a generator, borehole or buy water or take care of the extended family since there is no welfare given the government's financial position. In the hyperinflation days salaries was the cheapest factor of production given that it was paid so irregularly though it went to twice monthly. As workers could not withdraw their money, remuneration was often in the following forms: *Fuel coupons were most popular and individuals were paid in liters of fuel *The product that the company is selling; e.g. pork/meat for the abattoirs *Foreign currency payment was illegal and one had to seek special dispensation or had to show that their revenue/funding was received in foreign currency like NGOs or exporters *Shares for the listed companies on the stock market (not in the traditional option scheme but just getting shares) Prices were price controlled. By remunerating in the product it basically allowed the employees to side sell for real value. Zimbabwe traditionally had a competitive advantage in its cost of labor. With "dollarisation" and higher cost of living this is slowly being eroded. For example, an average farm employee probably earned the equivalent of $20 but could buy a basket of goods currently worth $500. Now, the average farm worker earns $80 and that basket of goods is, as mentioned, $500, the basket being soap, meal, school fees, protein foods, etc.


Negotiation of salary

Prior to the acceptance of an employment offer, the prospective employee usually has the opportunity to negotiate the terms of the offer. This primarily focuses on salary, but extends to benefits, work arrangements, and other amenities as well. Negotiating salary can potentially lead the prospective employee to a higher salary. In fact, a 2009 study of employees indicated that those who negotiated salary saw an average increase of $4,913 from their original salary offer. In addition, the employer is able to feel more confident that they have hired an employee with strong interpersonal skills and the ability to deal with conflict. Negotiating salary will thus likely yield an overall positive outcome for both sides of the bargaining table. Perhaps the most important aspect of salary negotiation is the level of preparation put in by the prospective employee. Background research on comparable salaries will help the prospective employee understand the appropriate range for that position. Assessment of alternative offers that the prospective employee has already received can help in the negotiation process. Research on the actual company itself will help identify where concessions can be made by the company and what may potentially be considered off-limits. These items, and more, can be organized into a negotiations planning document that can be used in the evaluation of the offers received from the employer.


Effects of perspective

The same 2009 study highlighted the personality differences and negotiation mind-sets that contributed to successful outcomes. Overall, individuals who are risk-averse (e.g., worried about appearing ungrateful for the job offer) tended to avoid salary negotiations or use very weak approaches to the negotiation process. On the contrary, those who were more risk-tolerant engaged in negotiations more frequently and demonstrated superior outcomes. Individuals who approached the negotiation as a distributive problem (i.e. viewing the a higher salary as a win for him/her and a loss to the employer) ended up with an increased salary, but lower rate of satisfaction upon completion. Those who approached the negotiation as an integrative problem (i.e. viewing the negotiation process an opportunity to expand the realm of possibilities and help both parties achieve a “win” outcome) were able to both secure an increased salary and an outcome they were truly satisfied with.


Gender differences

Salary disparities between men and women may partially be explained by differences in negotiation tactics used by men and women. Although men and women are equally likely to initiate in a salary negotiation with employers, men will achieve higher outcomes than women by about 2% of starting salary Studies have indicated that men tend to use active negotiation tactics of directly asking for a higher salary, while women tend to use more of an indirect approach by emphasizing self-promotion tactics (e.g. explaining the motivation to be a good employee). Other research indicates that early-childhood play patterns may influence the way men and women negotiate. Men and women tend to view salary differently in terms of relative importance. Overall level of confidence in a negotiation may also be a determinant of why men tend to achieve higher outcomes in salary negotiations. Finally, the awareness of this stereotype alone may directly cause women to achieve lower outcomes as one study indicates. Regardless of the cause, the outcome yields a disparity between men and women that contributes to the overall wage gap observed in many nations. The Constitution of the Republic of South Africa 239 provides for the right to fair labour practices in terms of article 23. article 9 of the Constitution makes provision for equality in the Bill of Rights, which an employee may raise in the event of an equal pay dispute. In terms of article 9(1) “everyone is equal before the law and has the right to equal protection and benefit of the law'” Furthermore, “the state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language, and birth.” South African employees who were in paid employment had median monthly earnings of R2 800. The median monthly earnings for men (R3 033) were higher than that for women (R2 340) - women in paid employment earned 77,1% of what men did.


Role of weight

Research done in 2011 showed that the “weight double standard” may be more complex that what past research has suggested. This is not only relevant to women, but also to men. The smallest income gap differences occur at thin weights (where men are penalized and women are rewarded) and the opposite happens at heavier weights, where the women are affected more negatively.Judge, Timothy A., Department of Management, Warrington College of Business, University of Florida, FL, US. Cable, Daniel M., Department of Organisational Behaviour, London Business School, London, England


See also

*
Executive compensation Executive compensation is composed of both the financial compensationFinancial compensation refers to the act of providing a person with money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed ...
*
List of countries by average wage The average wage The national average salary (or national average wage) is the average, mean salary for the working population of a nation. It is calculated by summation, summing all the annual salaries of all persons in work and Division (mathema ...
* List of countries by monthly average wage * List of countries in Europe by average wage * List of largest sports contracts * List of salaries of heads of state and government * List of single-digit salary earners * Peak earning years * Salaryman (Japan)


References


External link

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