Tag: Labor

Flexible employment and labor dispatch difference
What is the difference between flexible employment and labor dispatch? The wave of enterprise digitalization is sweeping. Affected by the new crown pneumonia epidemic, many companies are facing the test of life and death. This difficult time has also brought about profound changes in the employment relationship between companies.

Here are the articles to explain, Distinction and Difference between flexible employment and labor dispatch.

As the business of enterprises cannot be carried out usually, more and more enterprises have begun to pay attention to flexible employment, and the demand for flexible employment of enterprises has exploded.

The main differences between flexible employment services and labor dispatch are:

Different standards for paying employees’ wages:

Labor dispatch employees are sent to work for their employers, and they stand usually paid for equal work according to the employer’s regular employees. Also, Wages for flexible employment are determined and paid entirely by the flexible employment service.

Different cost settlement cycles:

labor dispatch personnel are the same as the employer’s regular employees. The employing unit shall pay wages to the dispatching agency every month, and also the dispatching agency shall pay wages to the dispatched personnel. Therefore, sending agencies and employers usually make monthly settlements. However, flexible employment is different. Also, Service providers and employers usually agree on a settlement cycle based on business progress.

Different payment objects:

labor dispatch is a labor contract relationship. Employers pay wages to employees by dispatching enterprises, employees provide labor services to employers, and enterprises pay consideration for the use of labor. Flexible employment is a contractual relationship in which the enterprise pays for the work performed.

Different business independence:

Since flexible employment is for specific businesses, flexible employment service providers need to lead the business process and manage on-site personnel. Labor dispatch control by the actual employer, and the dispatched personnel stand completely controlled and managed by the employer. The labor dispatch agency does not involve the business issues of the approved employer.

Advantages of flexible employment.
1. Improve the flexibility of business operations. In the business operation process, there will be some unconventional problems or businesses. At this time, you can temporarily find some professionals to solve these problems or complete these businesses, especially in today’s information age, this is not difficult, which makes business operations more flexible.
2. Reduce costs, especially for enterprises with off-season and peak seasons on the one hand, which greatly reduces the employment cost in the off-season.
The above has introduced the main differences between flexible employment services and labor dispatch. If you have any questions about flexible employment, please consult the editor to answer them!

What is the difference between flexible employment and labor dispatch? Image by sawaeng wonglakorn from Pixabay.
January 31, 2023
What does Labor cost? Introduction, Meaning, and Control
Labor costs represent human contribution. Labor cost is sensitive. The second Major element of cost in most of the manufacturing undertakings is labor cost. Proper accounting and control of labor costs, therefore, constitutes one of the most important problems of management. In controlling labor costs, the problem is complicated by the human element.

Here are explain; What does Labor cost? Introduction, Meaning, and Control.

Introduction: Under the present political conditions with restive labor in an organized industry, it is very difficult to reduce labor costs. Therefore, proper control and accounting for labor costs are one of the most important problems of a business enterprise. But control of labor costs presents certain practical difficulties unlike the control of material cost. The human element in labor makes difficult the control of labor costs whereas materials, being inanimate, could subject to rigid control.

Labor is the most perishable commodity and as such should effectively utilize immediately. Labour, once lost, cannot recoup and is bound to increase the cost of production. On the other hand, materials, being durable, can use as and when required and can store without having to incur an immediate loss.

Meaning of Labor Cost:

Payment of remuneration to the workers for their service to the firm knows as labor payment. This is the second element of the total cost. It may be direct or indirect. If it treats as a direct expense, it will include prime cost and if it relates to the factory, it will treat as an item of factory cost. Direct labor costs or Direct wages represent the cost that is incurred directly to change the composition, form or condition of a product.

Its primary nature is that it can easily identify and allocated to specific cost units. It also varies directly with the volume of production/output. Indirect labor costs, on the other hand, are the number of wages paid to workers who are not related to change the form, composition of a product but they engage themselves to complete the product, e.g. Supervisor’s Salary works office staff salaries, etc.

Bakers Labor! #Pixabay.

It is interesting to note that the difference between direct labor costs/direct wages and indirect labor costs/indirect wages depends on the types of work/job done and at the same time, the conditions in which cost of labor incurred. Under the circumstances, some labor costs treated as direct whereas the same treats as indirect in some other cases.

So, they will treat as a direct one when; 1) the payment makes to the workers to change the composition of a product, and 2) identification of the job is possible. Similarly, labor costs will treat as indirect when; 1) the same is not directly related to change or form of a product, 2) identification is not possible.

Control of Labour Cost:

To control the cost of labor (both direct and indirect), it becomes necessary to study the behavior of labor, to control the attendance and departure of workers, measurement of performances, assessing the results, time and motion study, etc. It is the function of the management to control the cost of labor in every step whether the same is direct or indirect. Individual columns of timesheet and job cards should maintain direct and indirect labor costs for proper ascertaining and controlling the cost of labor.

We know that direct labor costs/direct wages an element of prime cost whereas indirect labor costs/indirect wages an element of factory cost. Direct labor cost can control easily as it relates to variable cost which varies with the quantity produced, i.e. if more quantity produces with the same rate of remuneration, a post per unit must reduce. But it is not so easy to control the indirect labor cost.

What does Labor cost? Introduction, Meaning, and Control. #Pixabay.

Control over Labor cost:

This is so because labor consists of a lot of different individuals, each with a different mental and physical capacity and each with a different personality.

Proper control over it involves the following:
- Appropriate systems for recruitment and selection, training and placement of workers.
- Satisfactory methods of labor remuneration.
- Healthy working conditions consistent with legal requirements and competitive undertaking.
- Method of assuring efficient labor performance.
Direct and Indirect Labor Costs:

For accounting, they are classified into;
1. Direct, and.
2. Indirect.
Direct Labor Cost:

This cost incurs on the employees who engage directly in making the product. Their work can identify clearly in the process of converting. The raw materials into the finished product called direct labor costs. For example, wages paid to the workers engaged in the machining department, fabrication department, assembling department, etc.

Construction Labor; Direct and Indirect work! #Pixabay.

Indirect Labor Cost:

Indirect employees not directly associated with the conversion process. But assist in the process by way of supervision, maintenance, transportation of materials, material handling, etc. Their work benefits all the items being produced and cannot specifically identify with the individual products. Hence, the indirect labor cost should treat as production overhead. These costs will accumulate and apportion to different cost centers on an equitable basis and absorbed into product cost by applying the overhead absorption rates.

Items of Labour Cost:

They can analyze into the following:
- Monetary benefits are payable immediately; Salaries and Wages, Dearness and other allowances, production incentive or bonus.
- Monetary benefits after some time in the future; Employer’s contribution to P.F., E.S.I., Pension, Gratuity, Profit linked bonus, etc.
- Non-monetary benefits (Fringe benefits); Free or subsidized food, free medical or hospital facilities, free or subsidized education to the employee’s children, free or subsidized housing, etc.
July 9, 2019
Introduction to Wages: Meaning, Definition, Types, and Methods
What does it mean by Wages? A fixed regular payment earned for their services typically paid on an hourly, daily or weekly basis. Wage compensation pays to employees for work for a company during a period. Wages or labor charges always pay based on a certain amount of time, the article explains below along with their topics Meaning, definition, types, and methods. For example; Employees who receive labor charges cannot also receive a salary, but they can receive a commission. A commission is a payment for a specific action. Commissions are most commonly found in the sales industry. Salesmen and women often pay a base wage and then paid a commission based on how many sales they make during a period.

Know and Understand the Wages and their Introduction, Meaning, Definition, Types, and Methods.

Lower-level employees pay based on the amount of time worked. These employees usually have a timesheet or time card to keep track of the hours worked per week. Most modern employers have computerized systems to keep track of hourly employee hours. Employees must log into the system and log out to record their hours worked. Depending on the state, these employees then pay once a week or once every other week. Hourly employees must receive overtime benefits if they work more than 40 hours each week.

Meaning of Wages:

Wages are the reward paid to the worker for his labor. The term “labor”, as used in Economics, has a broad meaning. It includes the work of all who work for a living, whether this work is physical or mental.

It also includes the exertions of independent professional men and women like doctors, lawyers, musicians and painters who render service for money. In fact, “labor” in Economics means all kinds of work for which a reward is paid. Any type of reward for human exertion whether paid by the hour, day, month or year and paid in cash, kind, or both call labor charges.

Definition of Wages:

Here are below the definition of wages defines by different authors.

According to Benham;

“A wage may be defined as the sum of money paid under contract by an employer to the worker for services rendered.”

According to A.H. Hansen;

“Wages is the payment to labor for its assistance to production.”

According to Mc Connell;

‘Wage rate is the price paid for the use of labor.”

According to J.R. Turner;

“A wage is a price, it is the price paid by the employer to the worker on account of labor performed.”

Types of Wages:

Labor charges typically paid on an hourly, daily or weekly basis. In real practice, wages are of many types as follows, and also you’ll understand their methods below are:

1] Piece Wages:

Piece wages are the wage paid according to the work done by the worker. To calculate the piece wages, the number of units produced by the worker takes into consideration.

2] Time Wages:

If the laborer pays for his services according to time, it calls a time wage. For example, if the labor pays a dollar $5 per day, it will term as a time wage.

3] Cash Wages:

Cash wage refers to the labor charges paid to labor in terms of money. The salary paid to a worker is an instance of cash wages.

4] Wages in Kind:

When the laborer pays in terms of goods rather than cash, it calls the wage in kind. These types of wages are popular in rural areas.

5] Contract Wages:

Under this type, the wage fixes at the beginning of complete work. For instance, if a contractor tells that he will pay a dollar $5,000 for the construction of the building, it will term as contract wage.

Understand the Nominal and Real Wages.

The money paid to a worker as a reward for his work knows as a nominal wage. But what money wants for? Obviously for the goods and services it can buy. By ‘real wage’, we understand the satisfaction that a laborer gets from spending his money wage in the form of necessaries, comforts, and luxuries. It means the total benefits, whether in cash or kind, that a worker enjoys by working at a certain job.

The following are the two main concepts of wage:
- Nominal Wage.
- Real Wage.
Now explain;

1] Money or Nominal Wages:

The total amount of money received by the laborer in the process of production calls the money wage or nominal wage. The nominal or money value of labor charges express at current prices and is not adjusted for the effects of inflation. In contrast, the value of the wage or earning that someone earns each year expresses at constant prices and therefore have been adjusting to taking into account price changes.

2] Real Wages:

Real wages mean the translation of money wage’s into real terms or in terms of commodities and services that money can buy. They refer to the advantages of worker’s occupation, i.e. the amount of the necessaries, comforts, and luxuries of life which the worker can command in return for his services. An example will make things clear. Suppose “A” receives Dollar $100 p.m. as money wage’s during the year.

Suppose also that midway through the year the prices of commodities and services, that the worker buys, go up, on average, by 50%. It means that though the money wage remains the same, the real wages (consumption basket in terms of commodities and services) reduce by 50%. Real wage’s also included extra supplementary benefits along with the money wage.

Introduction to Wages: Meaning, Definition, Types, and Methods, #Pixabay.

Understand the Methods of Wage Payment.

From the payment, wage’s can classify as:
- Cash wages or wage’s in kind, according to as the payment makes in cash or kind.
- Time wages, when the wage rate fixes per hour, per day or month.
- Piece wages, when the worker pays according to the work done, and.
- Task wages, which is a payment on a contract basis, i.e., payment for finishing a specified job.
Wage’s give different names, e.g., salaries for the higher staff, pay to the lower staff like clerks and typists, wage’s for the workers, fees for persons in independent professions like lawyers and doctors, commission for middlemen, brokers, etc., and allowance for special work or special reasons, e.g., traveling allowance, dearness allowance, etc.
April 19, 2019