COPYRIGHTED MATERIAL
WHAT DOES THAT MEAN?
TERM
DEFINITION
Affordable Care Act
U.S. law increasing the affordability of healthcare insurance and requiring everyone to have health insurance coverage; also called ObamaCare.
base salary a fixed amount of money paid to an employee for work performed, not including commission, benefits or bonuses. compensation package everything a company provides to an employee in exchange for working, including base salary bonuses, commissions, and employee benefits. Cost of Living Adjustment “COLA”; a built-in adjustment to base salary that offsets the effects of inflation. defined benefit plan a retirement plan that is funded by the employer and promises a specified monthly amount of money at retirement; pension. defined contribution plan a retirement plan where the employee, employer, or both, contribute money each pay period to the employee’s retirement account. employee benefits non-cash or other compensation paid to an employee; there are a multitude of types of employee benefits. PRODUCT PREVIEW employee stock ownership plans “ESOP”; an employee benefit program which provides employees with ownership of the company’s stock, making employees part-owners of the company. a federal government-sponsored program guaranteeing certain benefits for people who meet eligibility criteria. “FMLA”; a federal law entitling employees to take unpaid leave for medical reasons, the birth of a child, or to care for a sick family member. “FICA”; federal law requiring employers to collect Social Security and Medicare taxes from an employee’s paycheck. “FSA”; a special account into which an employee puts pretax money that can be used to pay for certain healthcare costs and costs of caring for dependents. a schedule that is an alternative to the traditional 9 to 5, 40-hour work week, allowing employees to vary their arrival and/or departure times. a form filed with the Internal Revenue Service by the employer of an independent contractor reporting what they paid the independent contractor that year. base salary plus any money received for commissions, overtime, and benefits before any deductions are taken. a higher wage, bonus, overtime, or commission paid to promote the productivity of an employee. person who is not a direct employee but completes work for a company pursuant to a contract; also called freelancer. entitlement program Family andMedical Leave Act of 1993 Federal Insurance Contributions Act Flexible Spending Account flextime Form 1099 gross salary incentive pay independent contractor
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Chapter 4 | Pay. It’s More Than a Salary
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