Individual Employment Opportunity Act An Employer

Compensation is one of the most important aspects of business. It attracts, motivates, and retains skilled employees; therefore, evaluating compensation correctly to meet the needs of the business and satisfy the wants of the employee is also extremely important. The aspects that Echo Inc. should consider when evaluating their compensation practices are the different limitations placed on pay, the benefits that are required by the government, optional benefits, and the different pay for performance plans. When considering how to pay employees, a business must factor in the legal requirements of pay placed by the government. Government regulations affect pay by implementing the equal employment opportunity, minimum wage, overtime pay, and†¦show more content†¦Although, company’s do not have to pay salary workers for over time. Two additional federal laws, the Davis- Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, govern how much federal contractors are paid. The calculation of prevailing wages at which federal contractors must be paid is thirty percent of the local labor force. These regulations must be taken into consideration when deciding an employee’s base pay. There are various pay level strategies to choose from including: lead the market, match the market, lag the market, hybrid, employer of choice, or cafeteria plan. Setting higher wages than competitors helps attract quality applicants in larger quantities. It also increases employeeà ¢â‚¬â„¢s work efforts, reduce turnover, and lower monitoring costs. While high wages are beneficial to the employees a business determine if they can afford to pay a higher wage, or if the money could be better used somewhere else within the company. The government not only places certain limitations on pay they also require employers to provide certain benefits. These required benefits are social security, unemployment insurance, workers’ compensation, unpaid family and medical leave, and health care benefits. The Social Security Act of 1935 provides that if a worker meets certain requirements they will receive retirement benefits that are based off their age and earning history. Over 90% of U.S. employees are covered under this program. The Social Security Act also