Business - The employer

The Employer – Chapter 25
An employer is a person or firm who hires others. i.e. Employees, to work for them in return for payment.
An entrepreneur is a person who comes up with an idea and sets up a business to develop that idea at a profit.

Right and Responsibilities of an Employer
RIGHTS
RESPONSIBILITIES
To set up and run the business.
Obey all employment laws.
Hire the most suitable people to fill vacancies.
Treat all employees equally.
Sack employees due to poor standard of work.
Operate a healthy and safe workplace.

Give employees correct number of holidays.

Pay a fair wage for the work done.

Give employees a contract of employment.

Procedure for Employing Staff
The human resources manager is responisble for the employees in the firm.

1) Decide how many employees you need and what duties they will have.
2) Draw up a plan for each job showing what the person is required to do and what qualifications and experience they should have. This is know as a job description.
3) Draw up a job advertisement. Include important details e.g. Qualifications required, procedure for applying, closing date. Employers cannot discriminate when they are hiring staff, so make sure there is no reference to male or female – just 'person' required.
4) Decide where to place the advertisement e.g. Newspapers, radio job slots, local newsletters, the internet
5) Coll ect all the replies which should include a letter of applicatin and curriculum vitae (CV) and draw up a list of those applicants who will be interviewed (known as a shortlist).
6) Arrange the interviews to be held and inform the applicants who have been selected for the interview.
7) Select the most suitable staff to fill each vacancy and offer them a contract. (probationary period)
8) Arrange for the new staff to be introduced to the other employees and shown around (known as induction). The will help the new employee to learn how everything works. eg. The photocopier, where everything is, the staff canteen etc.

Descriminate means to treat one person less favourably than another, for example because one is a man and one is a woman.
A probationary period is a trial period. The new employee may be let go after this period if they are not suitable for the job.

Employee Records
Employers must keep a large amount of information about each of their employees e.g.
Letter of application
Curriculum vitae
Tax Details
Contract of Employment
Details about their performance, attendance and punctuality
Medical certificates
All of these records are important and also private. Therefor, they must be filed carefully and safely so that the information can be easily found when needed but only by those who have permission to do so.

Contract of Employment
A contract of employment is a document containing all the details about the job being offered to the employee. It includes.
Name and address of the employer and the employee
Date the employment started
Lenth of the probationary period, if any
Rate of pay
Amount of paid holidays the employee is entitled to each year
The range of duties that the employee must perform as part of the job
Number of hours they must work each week.
Details about their pension and how uch they have to pay towards this.

Paying the Staff
Each week or month the employer must pay employees for the work done.
A wage is based on the number of hours worked or the quantity of goods produced.
A salary is when the employee receives a fixed amount each time they are paid.
The basic pay is the amount the employee receives for a normal working week before any deductions have been made.

Overtime
If any employee works more hours then they are normally required to do it is called overtime. This may be necessary if a particular job has to be finished by a certain date but it would not be possble to achieve this during a normal working week.
Overtime is usually volutary and is paid at a highter rate eg.
One and half time the normal hourly rate (time and a half).
Twice the normal hourly rate (double time).
Three times the normal hourly rate (triple time).

Flexitime
Where an employee if free to choose when they work during the week once they work the correct number of hours. eg. 39 hours in a week, they can work these hours anytime between 8am and 6pm monday to friday.

Gross Pay
The gross pay is the employee's total pay, i.e. Basic pay plus any overtime and bonus payments. This is what they earn before any deductions are taken away.

Calculating the Gross Pay
TIME RATE
Time rate is where an employee is paid by the hour. In other word, the more hours you work, the more you get paid. Usually operates a clocking in, clocking out system.
Disadvantage is it does not reward employees who work harder during each hour.

PIECE RATE
Piece rate is hwere an employee is paid for each unit of the firm's product that they produce. The supervisor or factory manager will usually keep a record of the number of prouducts produced by each employee.

COMMISSION
Commission is where the employee is paid a percentage of the sales they made during the week or month. For commission to be used, it must be possible to calculate exactly how much each employee made in sales.

Net Pay
An employee's net pay (take-home pay) is the actual amount of money they take home with them for the work they do.

Calculating Net Pay
Statutory Deductions
These deductions must be taken by law from the pay of every employee. The two statutory deductions are: PAYE (Pay As You Earn) which is income tax. PRSI (Pay Related Social Insurance)/ USC (Universal Social Charge)
PAYE is collected by the employer and paid to the government for the running of the country.
PRSI is used by the government for: To pay a regular income to those who are unemployed (Jobseeker's Benefit) To pay a regular income to those who are out of work due to illness or a disability. To pay a regular income to those who are on maternity leave. To pay a regular income to those who have retired from work.

Non-Statutory Deductions
These are voluntary deductions i.e.The employee has a choice if they with to pay or not,eg. Union Subscriptions Private Pension Payments (known as superannuation) Health insurance, such as VHI or Aviva

The Payslip
This is given to the employee each time they are paid. It shows: How much they earned, i.e. Their gross pay. The amount that was taken away from the employee's pay, i.e. Their deductions. The employee's net pay, i.e. Their take home pay.

Employee: Anthony Dalton (a)
Week 11
28 March (b)
Pay
€
Deductions
€

Net pay (l)
670.00
Basic (c)
780
PAYE (f)
350

Overtime (d)
400
PRSI/USC (g)
90

Pension (h)
50

15

5

Gross pay (e)
1180
Total deductions (k)
510

(a) Name – Employee's Name
(b) Date – Date on which payment was made
(c) Basic – Employee's pay for a normal working week
(d) Overtime – The extra income earned by Anthony during the week.
(e) Gross pay – Total income earned for the week before any deductions are taken away.
(f) PAYE – Represents the amount of income tax taken away from his pay.
(g) PRSI/USC – Insurance and levies taken away from his pay.
(h) Pension – The amount paid each week towards his pension plan.
(i) Health – Medical health insurance
(j) Union – Amount paid to be a member of a trade union
(k) Total – Total amount taken away from his pay this week.
(l) Net pay – Amount he actually takes home.

Gross Pay = Total pay before any deductions are made.
Net Pay = Gross pay after deductions have been taken away.

Tax Credits
A certain amount is subtracted from the tax owed and the amount remaining is what the employee has to pay.

Wages Book
A written record of the wages paid to each employee by the firm each week or each month. It contains all the information from each paysleip as well as the amount of PRSI paid by the employer to each of their employees.

Date
Employee Name
Gross Pay
Deductions
Net
Employer

Basic
O/T
Total
PAYE
PRSI
Pens.
Health
Union
Total
Pay
PRSI
06/04/13
Helen McCoy
156
34
190
45
15
10
5
3
78
112
19
06/04/13
Peter McCue
180
50
230
65
19
12
6
3
105
125
23
06/04/13
Elaine Smith
200
70
270
72
22
12
5
3
114
156
27
06/04/13
Jerry Tighe
170

170
40
13
10
4
3
70
100
17
06/04/13
Kitty Voyles
240
50
290
82
23
12
5
3
125
165
29

Total
946
204
1150
304
92
56
25
15
492
658
115

Methods Of Payment
CASH
Giving employee an envelope each week that contains their wages in notes and coins and their payslip.
ADVANTAGES
DISADVANTAGES
Suits employees who don't have a bank account.
Risk of theft, both from employer and the employee.
No cost to employer for paying the cash.
A lot more administration work involved eg. Notes and coins have to be counted in exactly right quantities.

Employers who pay their employees by cash must give the exact number of notes and coins required. They will aslo want to have the least quantity of notes and coins possible. Therefore before going to the back to collect the cash they should prepare a cash analysis statement the exact quantity of notes and coins required eg.

Employee
Name
Total
Wage
Euro
Cent

50
20
10
5
2
1
50
20
10
5
2
1
J.Maguire
256.88
5

1

1
1
1
1
1
1
1
L.Leahy
366.45
7

1
1

1

2

1

D.Dunne
422.19
8
1

1

1
1
2

E.Els
311.56
6

1

1
1

1

1
Total
1357.08
26
1
2
2
1
3
2
3
2
4
3
2

CHEQUE
The employer will write or print on the computer the cheques for each employee. Two people will normally sign each check eg. The managing director and the accountant. The cheque is then given to the employee with the payslip.

ADVANTAGES
DISADVANTAGES
Very safe since the cheques are only of use to the person named on the cheque.
Employees must go to the bank to lodge the cheque before they can spend the money.
Quick method of paying employees
Bank charges the firm for each cheque.

TRANSFER TO EMPLOYEE'S BANK ACCOUNT
When the employer arranges to have wages paid directly from the company bank account into the bank accounts of their employees. The company opens their online bank account and inputs the amount of money to be transferred to each employee's bank account as well as the date and time the payment was made. Financial institutions call the procedure Paypath. The employees must still receive a payslip.

ADVANTAGES
DISADVANTAGE
Completely safe method as money is transferred electronically.
Small charge for all electronic payments as well as an annual maintenance fee for having your bank account online.
Very quick method of paying employees.

Employees can get access to their money immediately at any ATM.

A curriculum vitae is a written account of a person's personal details, education record, workexperience, hobbies and interests.