| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
I know someone very close to me that works for a company that has a
system that works like this:
Employees get paid bi-weekly. When you start work, you get two
pay periods worth of pay; let's say this person earns $1000 per
pay period (to use a nice round number). The reason they get two
pay periods worth is because if a person has worked for the
company and then decides to quit, they just give their two weeks
notice and then they don't get paid for the last week of work.
At first, I thought this was ok. Then I thought what would happen
if this person got several raises after being at the company for
3-5 years and they were getting paid say $1500/pay period instead
of $1000? This is a loss of $500!
Is this legal? If not, how do we take action?
Also, there is a 401K plan in which all employees *must* contribute
at least 3% (I can't remember the exact number) of their pay. I
thought perhaps this is fine because it will force people to save
for retirement; but then, I was told that they get paid a fixed
interest rate of 4%! When the market was hitting all-time records
I considered this highway robbery! Is this also legal?
Thanks,
Dennis
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 623.1 | One opinion | KOALA::BOUCHARD | The enemy is wise | Sun Nov 28 1993 14:23 | 6 |
To answer the first question, it sounds like employees are simply being
paid a few weeks in advance, though the program may not make it appear
that way. Sounds perfectly legit to me.
The 401(k) doesn't sound like a very good deal, however -- unless the
employer is matching contributions...
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| 623.2 | Contributions not matched | 11SRUS::TLE::PERIQUET | Dennis Periquet | Sun Nov 28 1993 23:33 | 10 |
re: .-1
Employees are paid a few weeks in advance, but they are paid at today's
payscale. If they leave their job, they will not be paid by the later
(more valuable) payscale. It's this difference in today's payscale and
tomorrow's payscale that bothers me.
The employer does not match contributions.
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| 623.3 | It's just a shift early, not a transfer | TLE::JBISHOP | Mon Nov 29 1993 10:54 | 44 | |
I don't see a problem with the pay system. Consider that the
pay packets are effectively being shifted two periods early: the
"notice weeks'" pay is already in the employee's hands when he
or she leaves, and it is at the ending rate.
Here's an example: assume a person is hired at $x dollars per
pay period, gets a raise to $y after working three pay periods
and leaves after three more:
Expected system:
work, get $x,
work, $x,
work, raise, get $y,
work, $y,
work $y,
work, give notice, $y
<notice>, $y Total 2x + 5y
^
This is the pay for the "notice" period
.0 system:
get $x,
get $x, work,
get $x, work,
get $x, work,
raise, get $y, work,
$y, work,
$y, work, give notice Total 4x + 3y
^
This is the pay for the "notice" period
The difference is due to the timing of the raise: if you're being
paid two weeks in advance, you don't get the benefit of a raise
until two weeks have passed. You might also note that if you'd invested
the initial "extra" money, it would probably grow at least as much as
your pay.
As for the 401K stuff--that would bother me. I don't know what the
legal status is.
-John Bishop
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| 623.4 | Pay system OK to me | KOALA::BOUCHARD | The enemy is wise | Mon Nov 29 1993 13:34 | 4 |
The pay system simply means that a raise actually takes affect a couple
weeks after it is announced; same thing happens at Digital -- one is
given a raise effective as of a certain date. In your case that date
is just a few weeks farther in the future than you'd expect.
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| 623.5 | Thanks, I'll check out 401K system | 11SRUS::TLE::PERIQUET | Dennis Periquet | Mon Nov 29 1993 15:00 | 7 |
Ok. I can agree that the pay system is fine. The next time, I'm at
the library, I'll see what actions can be taken with the 401K system.
Thanks,
Dennis
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