Glossary

o f c u rre n tly used

W AGE TERMS

Bulletin No. 983

UNITED STATES DEPARTMENT OF LABOR

Maurice J. Tobin, Secretary

BUREAU OF LABOR STATISTICS 

Ewan Clague, Commissioner

June 1950

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Glossary

of currently used

W A G E TERMS

Bulletin No. 983

UNITED STATES DEPARTM ENT OF LABOR

Maurice J. Tobin, Secretary

BUREAU OF LABOR STATISTICS

Ewan Clague, Commissioner

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Washington 25, D. C. - Price 15 cents

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Federal Reserve Bank of St. Louis
Letter of Transmittal

United States D epartment of L abor,

B ureau of L abor Statistics,

Washington, D . C., M ay 1 5 ,19 5 0 .

The Secretary of L abor:

I have the honor to transmit herewith a glossary of wage terms in current use. The preparation of the Glossary was undertaken in an effort to clarify the meaning o f the many wage and 

salary terms now employed in such areas as collective bargaining, wage administration, and 

statistical reporting.

The Glossary was prepared in the Bureau’s Division o f Wage Statistics. Initial work was 

undertaken by Philip Arnow and carried through to completion by Charles Rubenstein. Edith 

M. Olsen also participated at one stage in the preparation of the definitions.

E wan C lague, Commissioner.

Hon. M aurice J. T obin,

Secretary of Labor.

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Preface

The Glossary of Currently Used Wage Terms was issued in multilithed form in December 1949. 

The demand for copies was so great that an early printing appeared advisable. Except for 

minor revisions, the present edition does not differ from the original multilithed version.

A preliminary draft of the Glossary was made available to numerous individuals in government, labor, business, and universities for critical comment. Many valuable suggestions were 

received, and the Bureau would like to take this opportunity to thank all of those who gave 

generously of their time in reviewing the preliminary definitions. No glossary of this type is 

ever complete, hence additional suggestions will be most welcome.

The present Glossary takes account of the fact that a wide variety o f terms relating to wages 

are used in wage and salary administration, collective bargaining, accounting, government 

regulation and statistical reporting. In each field, to a certain extent, special-purpose terminology has been developed. Many of the terms now in use are not too clearly defined; some 

appear to be similar but have different meanings and cannot be readily distinguished.

The variety of terms employed stems largely from the equally wide variety of uses to which 

wage and salary information is put. In collective bargaining alone, for instance, wage information is used to make various kinds o f comparisons between wages in one plant and wages in other 

plants; to measure the trend of wages in relation to the trend of living costs, production, profits, 

or other factors; to determine the proper internal alignment o f wage structures; and for other 

purposes. Wage information for these various uses may be required in the form o f rates of pay 

unrelated to the earnings of individual workers, in the form o f hourly or weekly earnings o f 

workers regardless of the method of wage payment or rates of pay, or in the form of indexes of 

wage rates or earnings.

In some instances, differences in the meaning of similar terms are a reflection of differences 

in systems of wage payment. The basic difference between the concepts of “ wages” and “ salaries” lies in the method of payment. A “ wage” system is ordinarily regarded as one under 

which payment is made by the hour or day to workers, most of whom do manual work; a “ salary” 

system is one under which payment is usually made on a weekly, semimonthly, or monthly basis 

to workers, most of whom do “ white-collar” or nonmanual work of some sort (some of it supervisory)., There are many kinds of wage and salary systems, each giving rise to some new 

terminology.

Some of the terms used are purely statistical or accounting formulations, somewhat abstractly 

created, and frequently not found in day-to-day wage administration or collective bargaining. 

They may have been designed to describe specially constructed series of data, such as the Bureau 

of Labor Statistics “ Urban Wage Rates” series, or to describe a series of estimated data like the 

Bureau’s “ Average Hourly Earnings Exclusive of Overtime Payments.”

Brief clarifying descriptions of the terms most frequently used are essential to full understanding and accurate use of wage and salary information. The compilation o f terms and 

definitions contained in this glossary was based largely on experience gained in the work of the 

Bureau of Labor Statistics and other government agencies. The definitions, except in a few 

cases where official government definitions or regulations are quoted, have been specially prepared for this Glossary, and are designed to indicate current usage and, insofar as possible, 

variation in usage of individual terms. The definitions are not presented, therefore, as “ standard” or “ correct” descriptions of usage.

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GLOSSARY OF CURRENTLY USED

WAGE TERMS

Across-the-Board Increase

A general wage increase affecting 

simultaneously all or most of the 

employees within a plant, company, 

or industry. Such an increase may 

be granted in uniform percentage or 

cents-per-hour terms. In the former 

case, the absolute amount of increase 

will differ among employees in accordance with their original rate 

levels.

Advance on Wages

In general, refers to any practice 

by which employees are entitled to 

draw wages or salaries in advance of 

actual work performance; e. g., wage 

advances to new employees, advances during slack seasons to workers on commission basis of wage 

payment, etc. Also applies to the 

payment of wages in advance of the 

regular pay day for services already 

rendered.

Allowed Tim e

Under incentive wage systems, the 

total time allowed or set as standard 

to complete a task or element 

thereof. Also relates to the amount 

of time permitted a worker for the 

care of tools, for rest periods, or for 

other reasons. This time is added

to operating time in computing the 

standard time allowed for a particular operation as the basis for 

establishing piece rates or production bonuses.

Annual Earnings

The total amount of compensation received for services by a worker 

during the year, including wages, 

salaries, and bonuses. The total 

annual earnings of a worker may be 

the result of work performed for a 

single employer or a number of employers in a given year.

Annual Wage or Employm ent Guarantee

An arrangement under which any 

employer guarantees his workers a 

minimum amount of wages or employment during the year. Under 

the Fair Labor Standards Act, as 

amended in October 1949, employers 

may enter agreements, with certified 

labor unions, which set a maximum 

of 2,240 hours of employment in a 

specified 52-week period and which 

guarantee not less than 1,840 hours 

(or not less than 46 weeks at the 

normal number of hours worked per 

week, but not less than 30 hours per 

week) and not more than 2,080

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hours. Under such agreements, employers are relieved from the overtime pay requirement for the first 

12 hours of work in a day, or 56 in a 

week, during the guarantee period. 

Thereafter they are liable for overtime pay at time and one-half for all 

hours after 40 in a week up to 2,080 

hours, and for all hours of work 

after 2,080 hours in the 52-week 

period. If the 2,240-hour maximum 

limit is exceeded, the entire agreement is made retroactively ineffective. {See also Guaranteed Wage 

Plan and Wage Advance Plan.)

Apprentice Rate

The schedule of rates applicable to 

workers being given formal apprenticeship training for a skilled 

job, in accordance with set standards* 

The rate schedule is usually established in such a manner as to permit 

the gradual achievement of the 

minimum journeyman rate.

Apprentice Scale

{See Apprentice Rate.)

Assessment

A charge levied by a union on each 

member for a purpose not covered 

by the regular dues. Assessments 

may be either one-time or periodic 

charges.

Autom atic Progression

A policy by which rates of pay of 

workers in jobs with established rate 

ranges are increased automatically 

and at set time intervals. The

width of the rate ranges and the 

number of steps within each range 

may vary among occupations, establishments, and industries, but under 

all fully automatic plans increments 

are received at specified time intervals until the maximum rate for 

the job is reached. Some plans 

combine automatic progression up 

to a specific point (for example, the 

midpoint) within the range, with 

discretionary increases, usually based 

on some type of merit review, up to 

the top of the range. Also refers to 

the automatic movement from a 

trainee rate to a job classification 

single rate or to the minimum of a 

job classification rate range.

Average Hourly Earnings

Exclusive of Overtime

Payments

In general, average hourly earnings from which the effect of premium 

payments for overtime work has 

been eliminated. Also, a measure of 

average hourly earnings published 

by the Bureau of Labor Statistics in 

which gross average hourly earnings 

in manufacturing are adjusted statistically to eliminate the influence of 

premium overtime payments at time 

and one-half the regular rate of pay 

after 40 hours of work a week. The 

adjustment does not compensate for 

other forms of overtime payment 

nor for other types of premium pay. 

{See also Average Straight-Time 

Hourly Earnings and Gross Average 

Hourly Earnings.)

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Average Straight-Time

Hourly Earnings

Average wages earned per hour 

excluding premium overtime payments and shift differentials. Commissions, production bonuses, and 

cost-of-living bonuses are included, 

but nonproduction bonuses (such as 

Christmas, profit-sharing, attendance, and service), tips, and allowances for room or board or other 

payments in kind are excluded. 

This concept is used by the Bureau 

of Labor Statistics in virtually all 

of its occupational wage rate studies 

and by numerous private organizations engaged in wage survey work. 

This definition, however, is not 

universally accepted. There appears 

to be general agreement on the 

elimination of overtime premium 

payments; but differences are found 

as to the treatment of shift differentials and the monetary value 

of some other wage and related 

practices. (See also Average Hourly 

Earnings Exclusive of Overtime 

Payments and Gross Average Hourly 

Earnings.)

Back Pay

Delayed payment of part of the 

wages for a particular period of 

time, arising from arbitration awards, 

grievance procedure regarding particular rates, errors in computation 

of pay, or current legal interpretation 

of wage legislation. (See also Retroactive Pay.)

Base Rate

The amount of pay for a unit of 

time; e. g., hour, day, week, month, 

or year, exclusive of premium pay 

for overtime or other premium payments. Under incentive wage systems, other than piece-rate systems, 

the term may refer to the rate to be 

paid for production at “ standard,” 

before the addition of extra earnings 

for production above standard; more 

generally, under piece-rate or other 

incentive systems, the term may 

refer to the amount guaranteed per 

hour or other time period. (See

also Guaranteed Rate.)

Bonus

A broad term which refers to any 

payment above regular or base rates. 

It includes extra payments for night 

work, hazardous work, regular attendance, and overtime, as well as 

any annual or regular allotment such 

as a Christmas bonus. It also refers 

to extra earnings of incentive workers above the base or guaranteed 

rate. Specific forms of bonuses are 

usually preceded by descriptive terms 

such as “ Christmas bonus,” “ attendance bonus,” etc. (See also

Nonproduction Bonus and Production Bonus.)

Bootleg Wages

The wages above those at the 

prevailing rate or the union scale 

which an employer may pay in a 

tight labor market to hold or attract 

employees. May also refer to wages

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at rates below the prevailing or 

union rate which an employee may 

accept in order to obtain employment. {See also Kick-back.)

Call-Back Pay

The pay (usually at premium 

rates) received by a worker called 

back to duty after completing his 

regular assignment. Union agreements frequently provide for pay for 

a minimum number of hours for 

workers called back to duty, usually 

at premium rates.

C all-In Pay

The amount of pay guaranteed to 

a worker who is called to work on a 

day on which he otherwise would 

not have reported, and finds no work 

available or is not given a full or half 

shift's employment. Call-in pay may 

be higher than the amount of reporting pay, and may be provided 

for at premium rates on specified 

premium days, such as Saturdays, 

Sundays, and holidays. {See also

Reporting Pay.)

Check-Off

The practice whereby the employer, by agreement with the union, 

regularly withholds from the wages 

of his union workers assessments and 

dues, and transmits these funds to 

the union. Under the Labor Management Relations Act of 1947, the 

employer must receive from each 

employee a written assignment which 

shall not be irrevocable for a period

of more than 1 year, or beyond the 

termination date of the agreement, 

whichever occurs sooner.

Clothing Allowance

An allowance granted by an 

employer to those of his employees 

who are required to buy special 

clothing, such as uniforms and safety 

garments, in connection with the 

performance of their work.

Commission Earnings

Compensation to sales personnel 

based on a percentage of value of 

sales. Commission earnings may be 

in addition to a guaranteed salary 

or may constitute total pay. Sales 

personnel on straight commission 

usually have a fixed drawing account 

which is balanced against actually 

realized commission earnings at 

specified periods. {See also Drawing Account.)

Com m on Labor Rate

In general, the hourly rate paid to 

adult males for physical or manual 

labor of a general character and 

simple nature, requiring no special 

training or skill and requiring little 

or no previous experience. In some 

establishments, this rate may apply 

to a common labor crew or pool who 

are assigned to specific tasks as 

required, while in other establishments it may refer to the rate paid 

for specific unskilled tasks, such as 

sweeping, hand trucking, loading, 

and unloading.

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Com m unity Wage Survey

A general term used to describe a 

survey designed to reveal the structure and level of wages within a 

particular geographical area for a 

given industry or, more typically, 

for broad categories of industry.

Comparable Rate

A rate paid for work agreed or 

determined to be comparable within 

a plant or within an area. Comparisons of this type may be limited 

to virtually identical occupations 

within a specific industry or be 

broadened to include occupations 

with similar characteristics in various 

industries. Such comparisons are 

used in wage negotiations and wage 

determinations.

Competitive Wage

In economic theory, the wage 

within a given labor market required 

to balance the demand for and supply 

o f labor of a particular type. More 

popularly, the wage level a company 

must maintain to compete with other 

firms in the same labor market for 

particular types of labor. Also used 

in the sense of the wage level that is 

required by a company to maintain 

a competitive price position with 

other firms in the same industry.

Contract Wage Payment

An arrangement whereby the 

worker contracts to perform a 

specific job for a predetermined 

amount of compensation.

Contributory Pension Plan

A pension plan for the benefit of 

the employee under which the cost 

is shared by both the employer and 

the employee. (See also Noncontributory Pension Plan.)

Cost-of-Living Adjustm ent

An adjustment of wages or salaries 

in accordance with changes in the 

cost of living as measured by an 

appropriate index of the retail prices 

of goods and services that enter into 

the consumption of low- or moderate-income families. Limitations as 

to the extent of wage adjustment are 

sometimes provided for. (See also

Escalator Clause.)

Daily Rate

For a worker hired on a daily rate 

basis, the rate of pay is normally 

expressed as a rate for a standard 

number of work hours per day. 

Like the hourly rate, the quotation 

of a daily rate normally excludes 

premiums that may be paid for lateshift work or overtime hours, as 

well as bonuses for special conditions 

of work or for other reasons unrelated 

directly to production.

Danger Zone Bonus

A bonus paid to employees who 

are required to work in an area where 

either the material or machinery is 

particularly h a z a rd o u s. Su ch 

bonuses are common in the explosives 

manufacturing industry and in the

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work of longshoremen. During the 

war, special payments were made to 

members of the merchant marine as 

war-risk bonuses.

Deadheading Pay

A special payment to a transportation worker who is required to report 

for work at a point far removed 

from his home terminal. “ Deadheading” refers to the extra time 

consumed in traveling to and from 

the place of work.

Dead Tim e

Time lost by a worker because of 

lack of materials, a break-down of 

machinery, or from other causes 

beyond his control. An incentive 

worker usually receives his guaranteed or base rate during this period. 

(See also Down Time.)

Dead Work

A term used in mining, referring 

to nonproductive work, including 

the removal of rock, debris, and 

other waste matter from the product 

mined.

Dismissal Compensation

A specific payment, in addition to 

regular wages, which is given an 

employee upon permanent termination of employment through no fault 

of his own. The dismissal compensation, or wage, may be paid in one 

sum at the time employment is 

terminated, or it may be spread over

a period of time. The amount of 

the payment to any one employee is 

usually related to the amount of his 

regular wages and his length o f 

service.

Dismissal Pay

{See Dismissal Compensation.)

Disposable Income

{See Spendable Earnings tf«</TakeHome Pay.)

Doubleheading Pay

Refers to the extra compensation 

given the railroad engineer where 

very steep grades require the use of 

more than one engine for some 

distance. The specific rules regulating payment under these conditions 

are found in the various union 

agreements.

Downgrading

The reassignment of workers to 

tasks with lower skill requirements 

and lower rates of pay. Usually 

resorted to when a marked change in 

products or in methods of production occurs and a lesser degree of 

skill in work performance is required; also applied in reductions of 

force which require reassignments 

of workers to jobs of lower skills. 

Downgrading was used by some 

establishments after World War II 

when conversion from war work to 

the manufacture of civilian goods 

required less skilled operations. {See

also Upgrading.)

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Down Tim e

Brief periods o f idleness while 

waiting for repair, set-up, or adjustment of machinery. (See also Dead 

Time.)

Drawing Account

A weekly allowance given to sales 

personnel working on a straight commission basis in retail and wholesale 

trade. The drawing account is 

balanced against total commission 

earnings at specified periods, in 

some cases 6 months or more. The 

anticipated earning power o f sales 

personnel is usually the determining 

factor in establishing the amount o f 

the drawing account. (See also

Commission Earnings.)

Dual Pay

A system o f wage payment used 

by railroads under which employees 

are paid on a mileage or hours basis. 

A standard mileage is defined as a 

basic day, usually 8 hours, for the 

purpose o f determining the daily 

rate. Wages are computed on the 

number of hours or miles, whichever 

yields the greater compensation to 

the employee.

Earnings

The total remuneration of a worker 

or group of workers for services 

rendered, including wages, overtime 

pay, bonuses, commissions, etc.

Entrance Rate

The hourly rate which a worker 

receives upon being hired into an

establishment. In the case of a 

skilled worker, the rate may be 

slightly less than or equivalent to the 

minimum job rate; it may also be 

identical with the probationary rate. 

The entrance rate for unskilled workers may be synonymous with the 

minimum plant rate, and may be 

increased after designated time intervals. (See also Minimum plant 

rate and Probationary Rate.)

Equal Pay for Equal Work

The payment of equal compensation to all employees within an 

establishment or other unit performing the same kind and amount of 

work, regardless of race, sex, or other 

characteristics o f the individual 

workers.

Escalator Clause

A provision in a union agreement 

allowing for the adjustment of wages 

in accordance with specified changes 

in the cost of living as measured by 

an appropriate index, or in the price 

of materials used in production, or 

in accordance with some other 

agreed-upon criterion, such as production index or price of product. 

(See also Cost-of-Living Adjustment.)

Expected Earning Level

(See Target.)

Expense Account

An account o f expenses paid or 

incurred by an employee in connec7

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tion with the performance of his 

services, usually covering such items 

as transportation, meals, and lodging 

while in a travel status and away 

from home. These expenses are 

reimbursable to the employee; payment is usually made after the 

expense account has been audited.

Explosive Trucking Bonus

A bonus paid to workers in the 

explosives manufacturing industry 

who are engaged in moving highly 

dangerous explosives by means of 

hand trucks.

Finish-Go-H om e Basis of

Pay

A practice under which employees 

are permitted to go home after completing a specific work assignment 

generally considered a standard day’s 

work. An example of the “ finishgo-home” basis of pay may be found 

in nonferrous smelters. Charging 

the furnace in less than 8 hours 

permits more time for the actual 

smelting process and workers are 

encouraged to complete charging in 

less than 8 hours but are paid for a 

full shift. Similar standards for a 

day’s work are set up in unloading of 

railroad cars or other shipping 

facilities, in shake-out work in 

foundries, and in other industries. 

Essentially, this may be considered 

an incentive method of pay; it 

generally involves making costly 

facilities available for use as quickly 

as possible.

Fixed Shift

The term applied to the type of 

shift on which a group of workers 

maintains the same schedule of hours 

week after week rather than rotating 

time-of-day assignments periodically 

with other groups. (See also Rotating Shift, Shift, Split Shift, and

Swing Shift.)

Flat Rate (A.uto Repair)

A system of remuneration used in 

auto repair shops. The flat rate 

refers to the labor charge made for a 

repair job and is usually based on the 

standard time specified in an official 

automobile repair manual. The auto 

mechanic receives a percentage of 

the total labor cost, which is computed at a rate which allows a margin 

of profit for the employer. If the 

actual time spent on a job is greater 

than the standard allowance, the 

actual time is the determining factor 

in computing the labor cost.

Floor Under Wages

(See Minimum Wage.)

Fringe Benefit

A benefit supplemental to wages 

received by workers, at a cost to 

employers. Among these benefits, 

commonly designated as “ fringe,” 

are paid holidays, paid vacations, 

pensions, and insurance benefits 

(life, accident, health, hospitalization, and m edical). The term 

“ fringe” was widely applied to

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benefits of this type during World 

War II in connection with the wage 

stabilization program.

Full-Tim e Earnings

Earnings received for working a 

regular schedule of hours over a 

stated period of time. Full-time 

earnings may be defined in terms of 

a day, week, month, or other period.

Full-Tim e Worker Rate

A rate paid to a full-time or regular 

worker, as distinguished from that 

paid to a part-time or temporary 

worker.

Garnishment of Wages

The practice of legally attaching 

the wages of a debtor and collecting 

the debt directly from his employer.

Going Rate

{See Prevailing Rate.)

Gross Average Hourly

Earnings

As used by the Bureau of Labor 

Statistics, a measure of hourly wages 

obtained by dividing total compensation prior to pay-roll deduction for 

taxes, social security, or other purposes for a given pay-roll period by 

man-hours worked plus hours paid 

for sick leave, holidays, and vacations. Total compensation includes 

premium payments for overtime and 

late shift work, as well as recurrent 

production and nonproduction bonuses. Computed monthly on an

industry basis for comprehensive 

groups of manufacturing and nonmanufacturing industries by the 

Bureau of Labor Statistics in its 

employment and pay-roll reporting 

program. {Seealso Average StraightTime Hourly Earnings and Average 

Hourly Earnings Exclusive of Overtime Payments.)

Gross Average Weekly

Earnings

A measure of weekly wages typically obtained by dividing total compensation prior to pay-roll deductions 

for taxes, social security payments, 

or other purposes for a given weekly 

pay-roll period (or, by the use of a 

conversion factor for a period of 

longer duration) by total employment or, alternatively, by multiplying average hourly earnings by 

average weekly hours. Computed 

monthly on an industry basis for 

comprehensive groups of manufacturing and nonmanufacturing industries by the Bureau of Labor 

Statistics in its employment and 

pay-roll reporting program.

Guaranteed Rate

The rate of pay guaranteed to an 

incentive worker. In the case of a 

production bonus worker, this rate 

may be equivalent to or higher than 

the base rate. When earnings at 

incentive are lower than the guaranteed rates, allowances are made to 

bring earnings up to the guaranteed 

levels. {See also Base Rate.)

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Guaranteed Wage Plan

An arrangement, written or unwritten, by which an employer 

guarantees or assures to some or all 

of his employees, in advance, a 

definite period of employment or a 

specific amount of wages. In a 

study conducted by the Bureau of 

Labor Statistics in 1945 and 1946, 

this term was defined to include 

guarantees o f employment for at 

least 3 months a year or an equivalent amount of wages. (See also

Annual Wage or Employment Guarantee and Wage Advance Plan.)

Guarantee on Trial Rate

A minimum guaranteed rate that 

remains in effect during the time 

that trial runs are made on new work 

and a trial or temporary piece rate 

is in effect. The level of these 

guaranteed rates is usually higher 

than plant minimum job or base 

rates and is related to past earnings 

of the individual or the group of 

workers affected. In order to provide an inducement to the worker 

to return on an incentive basis as 

soon as possible, the trial rate is 

frequently set at 95 or 98 percent of 

the average earnings of the worker 

for a given number of weeks prior 

to the trial run. {See also Temporary 

Rate.)

Handicapped Worker Rate

A lower rate of pay for a worker 

whose efficiency is impaired because 

of physical or mental handicaps.

Under the Federal Fair Labor 

Standards Act, rates below the legal 

minimum wage may be established 

for handicapped workers in accordance with regulations issued pursuant 

to section 14 of the Act. {See also

Substandard Rate.)

Historical Wage Differential

{See Wage Differential.)

Holiday Pay

Pay to workers, typically at 

regular rates, for holidays not worked. 

For work on such days payments 

are often provided at premium rates.

Hourly Rate

Typically, the rate of pay expressed in terms of cents-per-hour, 

usually thought of as applying to 

manual and other workers remunerated on a time basis. Hourly 

rates are normally basic rates; i. e., 

exclusive of extra payments for shift 

work and overtime, and exclusive of 

production or nonproduction bonus 

paym ents. H ow ever, the term 

“ hourly rate” is sometimes interpreted to mean “ earned rate per 

hour” under incentive methods of 

wage payment.

Improvement Factor

A term used in an agreement 

negotiated by the United Automobile Workers (CIO) with the General 

Motors Corporation in May 1948, 

describing an annual increase in 

wages of a stipulated amount during

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the life of the agreement. The improvement factor is designed to 

enable the wage earner to share in 

the benefits resulting from increased 

productivity in the economy. Costof-living adjustments were also provided for in this contract.

Incentive Rate

The term “ incentive rate” may 

apply to a piece rate, a rate of pay 

per unit for production above a predetermined minimum standard of 

output, a ratio of management-labor 

sharing of labor cost savings resulting 

from the operation of an incentive 

system, etc. The incentive plan 

may contain as an integral part of 

its operation one or more kinds of 

special rates which also influence the 

worker’s pay: a guaranteed rate, a 

base rate, a down time rate, special 

rates for try-out on experimental 

work, etc.

Individual Rate

In many establishments, there is 

no formal wage structure (either job 

rates or rate ranges), and the rates 

paid are known as individual rates. 

These rates may be based in a loose 

way upon the job being done, or may 

be related to the training, ability, 

skill, and bargaining power of the 

individual worker. The term “ individual rate” is also used to indicate 

the rate actually received by the 

individual worker, as distinguished 

from the job rate shown in the rate 

structure maintained by an employer.

Intercity Differential

Differences in prevailing wage 

levels among a group of cities. 

Usually such differences are measured by rates for comparable occupations and industries from city to 

city, but more general measures are 

sometimes employed. In particular 

negotiations, historical relationship 

in rates between various cities may 

be of prime importance. In such 

instances, the rank of a particular 

city with respect to other cities may 

be of more significance than the 

percentage relationships among the 

cities over a period of years.

Job Classification

An arrangement of jobs in an 

establishment or industry into a 

series of categories, each of which is 

based on progressively higher requirements in terms of skill, experience, training, and similar considerations. Essentially, this process results in a rough grouping of occupations where distinctions between jobs 

are clear and sharp. Usually job 

descriptions are used as a basis for 

classification. {See also Job Evaluation and Labor Grade.)

Job Description

A written statement listing the 

elements of a particular job or 

occupation.

Job Evaluation

The evaluation or rating of jobs 

to determine their position in a job

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hierarchy. The evaluation may be 

achieved through the assignment of 

points or the use of some other 

systematic rating method for essential job requirements such as skill, 

experience, and responsibility. Job 

evaluation is widely used in the 

establishment of wage rate structures 

and in the elimination of wage inequalities. It is always applied to 

jobs rather than the qualities of 

individuals in the jobs. (See also

Job Classification and Labor Grade.)

Job Rate

(See Minimum job rate and

Standard Rate.)

Joint Rate Setting

The process of establishing rates 

jointly by representatives of management and labor. The extent of labor 

participation in the actual process of 

rate setting varies from industry to 

industry and from establishment to 

establishment. In some of the apparel industries, the unions have 

achieved a relatively high degree of 

participation through formal joint 

organizational machinery. At the 

other extreme are situations where 

management alone sets rates, but 

labor through its grievance machinery has the right to “ protest” 

specific rates, and to adjust them in 

conference with management if the 

grievance is found to have validity.

Journeyman Rate

The rate of pay for a journeyman 

or a fully qualified worker in a

skilled trade or craft, who has completed an apprenticeship or equivalent training. Typically, such rate 

is a minimum rate for the trade in a 

particular area or a union scale; 

some journeymen, however, may 

receive rates above or below the 

union scale. The latter are generally paid to certain employees (superannuated or handicapped) by special 

arrangement with the respective 

unions.

Kick-back

A practice by which an employer 

or his representative arranges with 

his workers for a return of a part of 

their wages, established by union 

contract or by law, as a condition of 

employment. A Federal anti-kickback law was enacted in 1934, 

prohibiting kick-backs by workers 

employed on public construction 

work or on any work financed wholly 

or in part by Federal funds. (See

also Bootleg Wages.)

Labor Grade

One of a series of rate steps (single 

rate or rate ranges) in the wage rate 

structure of an establishment. Labor 

grades are an outcome typically of 

some form of job evaluation in which 

various occupational classifications 

are rated on the basis of such labor 

requirements as skill, experience* 

training, working conditions, etc. 

The occupations are then grouped 

into a limited number of steps or 

grades, so that occupations of ap12

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proximately equal" value” or" worth” 

fall into the same grade. (See also Job 

Classification and Job Evaluation.

Learner Rate

The rate or, more frequently, the 

schedule of rates applicable to 

workers inexperienced in the job for 

which they are employed, during 

their period of training. The schedule of rates is usually established in 

such a manner as to permit the 

gradual achievement of the minimum job rate as the learner develops 

competence on the job. Under the 

Fair Labor Standards Act, an employer may be permitted to employ 

learners in a specified plant at a wage 

lower than the legal minimum, 

whenever employment of learners at 

such lower rate is believed necessary 

to prevent curtailment of employment opportunities. Hearings are 

held by the Administrator to determine under what limitations as 

to wages, time, number, proportion, 

and length of service, special certificates authorizing the employment 

of learners at subminimum rates may 

be issued to an employer for certain 

occupations in his plant.

Loose Rate

{See Runaway Rate.)

M ake-up Pay

Allowances given by employers to 

piece workers to make up differences 

between actual piece-work earnings 

and earnings at guaranteed rates or 

statutory minimum rates. At times,

the term is also associated with the 

practice of permitting employees to 

earn a full week’s wages by making 

up for lost time.

Merit Increase

An increase in the wage rate of 

an individual worker on the basis of 

performance or service. This is 

widely used as a method of advancing 

workers within established rate 

ranges, sometimes in conjunction 

with a provision for automatic 

increases over part of the range. 

Merit increases may be administered 

informally at the discretion of the 

employer, or provision may exist 

for the periodic review of the performance of employees for granting 

of merit increases. {See also Wage 

Review.)

M inim um Rate

There are several kinds of minimum rates, those that are applicable 

to specific jobs and those that are 

applicable to entire establishments. 

Normally, those that are applicable to 

specific jobs are called minimum job

rates and those applicable to entire 

establishments are called minimum

plant rates. In addition, there are 

several varieties of guaranteed minimum rates, usually applicable to 

individual jobs under wage incentive 

systems.

Minimum job rate.—The minimum rate of pay for experienced 

workers on a given job. The minimum rate may be either a single rate

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or the minimum of a rate range. 

Union rates or union scales are 

usually minimum job rates. Normally, entrance rates, probationary 

rates, or learner rates fall below the 

minimum job rates.

Minimum plant rate.— Normally 

the minimum rate of pay for experienced workers in the lowestpaid job in the establishment. The 

term may, however, mean different 

things in plants with differently 

organized wage structures. In some 

plants, the term refers to the rate 

for the lowest-paid production job, 

although lower rates may exist for 

such jobs as common labor or janitor. 

In some plants, there are different 

minimum rates for men and women 

workers, or for white and Negro 

workers. In some plants, the socalled minimum rate may actually 

be a hiring or probationary rate. {See

also Entrance Rate.)

M inim um Wage

Rates of wages, established legally 

or through collective bargaining, 

below which workers cannot be 

employed. The Fair Labor Standards Act establishes the legal minimum wage to be paid to workers 

engaged in interstate commerce, 

unless such workers are covered by 

State laws which provide for higher 

minimum wages. Minimum rates 

are also established through collective bargaining and are applicable 

to individual plants, or to groupings 

of plants within an area or an 

industry.

Noncontributory Pension

Plan

A pension plan for the benefit of 

the employee under which the entire 

cost is borne by the employer. {See

also Contributory Pension Plan.)

Nonproduction Bonus

A bonus that depends on factors 

other than the output of an individual worker or a group of workers. Profit-sharing, safety, attendance, waste elimination, and Christmas bonuses are examples of nonproduction bonuses. {See also Bonus and Production Bonus.)

Occupational Rate

Rates (single or ranges) that are 

designated for particular occupations 

in an establishment, area, or industry. Generally, these rates are 

formal rates, and are paid to any 

worker who is qualified to perform 

the work of the occupation.

Occupational Wage

Relationship

The relationship of wage rates 

among occupations representative of 

a range of duties, skills, and responsibilities. Relationships may be 

analyzed within an individual plant, 

a community or region, or on an 

industry basis.

O ne-M an Car Differential

In the transportation industry, a 

premium paid to streetcar operators 

who operate vehicles without the 

assistance of conductors.

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O ut-of-Line Rate

(See Runaway Rate.)

Overtime Premium Pay

Payment of wages at a premium 

rate for time worked beyond the 

regular hours of employment established by union agreement, employer 

or industry practice, or law. In 

the United States, payment is 

typically made at one and a half 

times the regular rate of pay. 

Higher premium rates are found to a 

limited extent. (See also Premium 

Rate.)

Pace Setter

A worker who is better than 

average on a particular job, and 

whose production is used by the 

employer as a standard for measuring the amount of work which can 

be done in a given period of time.

Package

A term used to describe a combination of benefits received by 

workers as a result of collective 

bargaining. A package may include 

wage increases and other benefits of 

monetary value, such as insurance, 

paid holidays, paid vacations, and 

sick leave. The term generally 

implies that during the bargaining 

process the parties agreed that a 

specified amount of increase was to 

be applied partly to rates of pay and 

partly to the financing of the related 

benefits.

Part-Time Worker Rate

A rate paid to a part-time, temporary, or contingent worker, as 

distinguished from that paid to a 

regular or full-time worker. Parttime rates may be equal to, or lower 

or higher than, regular or full-time 

rates. During periods of ample labor 

supply, part-time rates are usually 

lower, but may become equivalent 

or higher when the labor market is 

tight because of keen competition 

for such help. Retail trade establishments and restaurants are among 

the industries dependent on parttime or temporary help to carry on 

their normal functions.

Payment by Result

Refers to any method of wage 

payment where the amount of the 

wage depends upon the amount of 

output. The term applies to straight 

piecework or other types of incentive 

systems. The production to which 

wages are related may be the output 

of an individual worker or the output 

of a group of workers.

Pay-Roll Deduction

A deduction from an employee's 

gross earnings made by his employer 

for social security, unemployment 

insurance, Federal income tax, local 

government pay-roll tax, union dues, 

special union assessments, group 

insurance premiums, etc.

Pay-Roll Period

The established frequency with 

which workers are paid in a particular

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industry, regardless of the time to 

which the rate applies. Thus, hourly 

rated workers may be paid weekly, 

biweekly, semi-monthly, or monthly. 

Similarly, workers on an annual or 

monthly rate basis may be paid 

weekly; the pay-roll period in this 

case is a week. The minimum 

frequency of pay-roll periods is often 

specified in State legislation.

Pay-Roll Tax

Taxes levied by the Government 

and paid by employers, employees, 

or both, creating funds from which 

employees receive retirement, unemployment, or other benefits. Also 

may refer to employer contributions, 

based on fixed percentages of total 

pay roll, to union or other private 

health and welfare and vacation 

funds, and to pay-roll taxes levied 

by cities.

Peg Point

An occupational rate for a key 

unskilled, semiskilled, or skilled job, 

establishing differentials within the 

wage structure. Term first used by 

the National War Labor Board in 

its decision on wages in the cotton 

textile industry in 1945 (see 21 

W. L. B. 882), and thereafter applied 

to the wage structure through collective bargaining.

Penalty Rate

An extra rate which is paid for 

hazardous jobs, late-shift work, Sunday and holiday work, or for overtime. (See also Premium Rate.)

Permanent Piece Rate

A rate established for a piecework job calculated to yield an 

appropriate level of earnings and 

based, generally, on experience with 

trial rates for the job assignment; 

such rates are expected to persist 

until basic conditions change.

Perquisite

Relates to the furnishing by employers of food, lodging, and other 

payments in kind to workers in 

addition to monetary compensation. 

Thus, waitresses are generally allowed a certain number o f meals, 

depending upon the ‘ length of the 

shift; board and lodging are usually 

supplied to workers in lumber camps 

and in some cases to farm labor.

Piece Rate

Under an incentive wage system, 

the predetermined amount paid to 

a worker for each unit of output. 

Rates may be based on individual or 

group output. (See also Incentive 

Rate.)

Piece Scale

(See Price List.)

P. M .

An incentive payment to sales 

personnel in retail trade to push and 

sell items on which the margin of 

profit is large, to dispose of slow 

moving items, or to clear out old 

stock. Also referred to as “ premium 

money,” and “ push money.”

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Portal-to-Portal Pay

In mining, the computation o f 

hours worked and paid for so as to 

include travel time between the 

mine entry and the place of work at 

the start and completion of the work 

shift. Also applies to payments 

made by other industries for time 

spent on company premises in getting 

to and from the working places.

Prem ium Money

(See P. M.)

Premium Rate

An extra rate paid for overtime, 

work on late shifts, holiday and 

Sunday work, or for work in particularly dangerous or unpleasant 

occupations. The term is also used 

in reference to extra rates paid to 

employees, usually because of exceptional ability or skill in the 

occupation. (See also Overtime Premium Pay, Penalty Rate, and Skill 

Differential.)

Prevailing Rate

Typically, the predominant or 

more common rate paid to a group of 

workers, usually with reference to 

specific occupations in an industry or 

labor market area. In actual application, the term “ prevailing rate” is 

used in a variety of ways. Some of 

the variations arise from differences 

in the concept of the geographic 

unit or industry that is pertinent to 

a particular situation. For example, 

where comparable occupations are

found in an area in numerous establishments, the geographic unit may 

be narrow as, for example, the 

metropolitan area. If labor has to 

be induced to migrate to the area 

where the prevailing rate is to be set, 

and no local labor is available, the 

geographic unit upon which determination is made may be a 

locality far removed from the site 

under consideration; at times, additional pay may be provided to 

induce labor to move. Such situations frequently arise under DavisBacon Act determinations. Under 

Public Contracts Act determinations, 

prevailing minimum wage determinations usually refer to an entire 

industry in the United States as a 

whole.

Another set of variations in the 

application of the term “ prevailing 

rate” arises from differences in 

industry limits used as a reference. 

Thus, certain occupations are found 

only in metalworking establishments, 

and prevailing rates for engine lathe 

operators in an area, for example, 

are in effect rates found in that 

portion of industry that employs 

such workers, whether or not the 

limits are specified in the determination. Other occupations, on the 

other hand, may be found in all 

industries in an area.

Frequently, variation in the concept of prevailing rate arises from 

differences in rate structure in 

particular occupations and in bargaining conditions. Thus, in the

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building trades and in some of the 

metal trades, there is a tendency 

toward single rate formation in an 

area, even though bargaining is conducted with reference to a minimum 

rate only, or a union scale.

Another source of variation in the 

use of prevailing rate concept arises 

from the use of quantitative or 

statistical descriptions of prevailing 

rates. Some of these terms are 

rather loosely conceived as, for 

example, “ going rate,” when reference is made to the rate received by 

a substantial number of workers, 

possibly the modal rate. In some 

situations, notably locality wage 

surveys, measures of prevailing rates 

relate to the arithmetic mean or to 

the median.

In view of these variations, the 

use of the term “ prevailing rate” 

requires specific mention of the area, 

occupation, industry, rate, and type 

of quantitative measure involved to 

have definite meaning.

Price List

A listing of piece prices or rates to 

be paid by a company or a group of 

companies making similar products* 

In unionized establishments, price 

lists are established typically upon 

agreement between the union and 

the employer.

Probationary Rate

The rate of pay for an experienced 

and otherwise qualified worker during the initial period of his employment on a new job or in a new plant. 

The probationary rate is usually 

lower than the minimum rate for the 

job (in which case it is usually 

indistinguishable from the hiring 

rate for the job), although it may 

sometimes be the minimum rate 

applicable to the individual job. {See

also Entrance Rate.)

Production Bonus

A bonus payment directly related 

to the output of an individual worker 

or a group of workers. Usually paid 

for production in excess of a quota 

or for the completion of a job in less 

than standard time. The bonus 

may be a flat amount paid for all 

production above standard or it may 

increase in various proportions as 

production increases. {See also Bonus and Nonproduction Bonus.)

Protest Price

In some industries, notably pottery and women’s dresses, piece rates 

on new work are determined on the 

basis o f previously developed time 

elements. A worker may not be 

able to earn an appropriate amount 

under such estimated time allowances 

and piece rates. If he does not earn 

enough, he enters a protest but continues to work at these rates until a 

review is made and new rates are 

set. Any adjustment in rates is 

usually retroactive to the time of 

protest or to the time the worker 

was started on the new work. {See

also Temporary Rate.)

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Push Money

{See P. M.)

Race Differential

Differentials in rates paid to 

workers of different races in the 

same occupation for similar or 

identical duties and responsibilities.

Rate Cutting

Term generally refers to reduction by employers of established 

incentive or time rates in the 

absence of changes affecting job 

content. May also refer to rate 

reductions in cases in which technological or other changes have 

altered job content and methods, or 

in which incentive rates were set 

“ too high” in terms of earnings 

levels for similar work in the industry 

or area.

Rate Range

A range of rates for the same job, 

with the specific rates of individual 

workers within the range determined 

by merit, length of service, or a 

combination of various concepts of 

merit and length of service. Rate 

ranges may be set up with various 

degrees of formality and more or less 

rigid rules respecting the position 

within the range at which new workers are hired and the rules concerning 

their automatic or nonautomatic 

advancement to the maximum rate. 

The range may be expressed as a 

spread from a set minimum to a set 

maximum rate (e. g., a spread of 

$1.40 to $1.60) or as a series of

specific rates between a set minimum 

and a set maximum rate ($1.60-A 

rate, $1.55— B rate, $1.50— C rate, 

$1.45— D rate, $1.40—E rate). In 

the latter case, the individual A-BC-D-E-points within the range may 

actually represent different jobs or 

classes or grades within jobs rather 

than parts of the same range. This 

would be the case, for instance, if 

the requirements for the rates related 

to job content rather than to the 

merit and ability of the individual 

worker.

A rate range, like a single rate, is 

usually established for experienced 

workers, and the minimum rate of 

the range is not intended for workers 

who are not at all experienced in the 

job. A complete and separate rate 

structure below the minimum rate of 

the range, including learner or apprenticeship schedules, is frequently 

established for workers not fully 

qualified for the full job rates. 

Automatic progression from the 

minimum to the maximum of the 

range after specified periods of 

service is common.

Rate Setting

The process of establishing rates 

through joint union-management action or by management alone. May 

involve use of job evaluation and, 

in the case of incentive plans, time 

and motion study. Job evaluation is 

used primarily for setting time rates 

or incentive base rates in proper 

relation to each other, taking into

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account for each job such factors as 

skill, responsibility, and working 

conditions. Incentive rate-setting 

involves the establishment of a 

production standard by time or 

other study methods. Rate setting 

may also involve comparison with 

rates for similar work in the industry 

or local labor market.

Real Wages

Real wages are represented by the 

goods and services typically consumed by workers that can be purchased with money wages; i. e., real 

wages are an expression of the purchasing power of money wages. 

Over periods of time, changes in 

real wages are obtained by dividing 

indexes of money wages by an appropriate index of consumers’ prices. 

Thus, if wages increase by 5 percent 

and consumers’ prices by 10 percent, 

real wages have declined by 4.5 

percent (105-s-llOX 100=95.5, the 

new level of real wages). The 

Bureau of Labor Statistics maintains 

a series on Gross Average Weekly 

Earnings in Current and 1939 Dollars, which indicates changes in the 

level of weekly earnings prior to and 

after adjustment for changes. in 

purchasing power as determined from 

the Bureau’s Consumers’ Price Index, 

the year 1939 having been selected 

for the base period.

Regional Differential

Differences in wage levels among 

several broad geographic sub-divisions. In the United States, attention has tended to focus on differentials that prevail between the 

South and the North. Such differences have particular significance 

in individual industries that are 

found in the South and in other 

parts of the United States. Important examples are: hosiery, textiles, lumber, furniture, and cotton 

garments. There are also significant differences in wage levels among 

other regions in the United States 

(New England, Pacific Coast, Middle 

West, etc.).

Regular Rate

The rate of pay received by a 

worker for all hours of work performed at straight-time rates. Also 

refers to the rate of pay at which a 

worker is predominantly engaged 

when he is subject to assignments 

at varying rates.

Reporting Pay

The amount of pay guaranteed to 

a worker who reports for work at 

the usual hour, without notification 

to the contrary, and finds no work 

available or is not given a full shift’s 

employment. Typically, pay for a 

minimum number of hours at regular 

rate is provided for in union agreements. (See also Call-in-Pay.)

Retroactive Pay

Delayed payment of part of the 

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tion of wage increases arising from 

wage negotiations. (See also Back 

Pay.)

Rotating Shift

The system of rotating the crews 

where two or more shifts are worked 

in an establishment. This system 

is designed to distribute day and 

night work on an equal basis among 

the various workers. In some industries, where 7-day operations are 

common, the work schedules may be 

arranged so that workers are given 

different days off in each week. 

(See also Fixed Shift, Shift, Split 

Shift, and Swing Shift.)

Round of Wage Increases

A term widely used after the end 

of World War II to describe broad 

wage movements affecting large 

segments of the economy. Thus, 

the “ first round” of postwar wage 

increases is identified largely with 

the period between VJ-day and the 

autumn of 1946; the “ second round” 

with 1947, etc. Actually, these 

wage movements exhibited great 

internal diversity and were in no 

sense uniform among industries or 

occupational groups or even, in 

many cases, among establishments 

in the same industry.

Royalty

In relation to wages, the payments to union health and welfare 

funds, such as those benefiting 

members of the United Mine Workers

and the American Federation of 

Musicians, although the term is not 

the official designation for such payments. In these cases, the application of the term stems, at least in 

part, from the fact that employer 

contributions are based on tons of 

coal mined and number of musical 

records produced.

For some types of professional 

workers, such as musicians, singers, 

and writers, payment fo> work is 

frequently based on a percentage on 

sales of the final product (book, 

article, or song). Such payments 

are referred to as royalties.

Runaway Rate

A piece rate or other incentive 

rate which results in earnings that 

are out of line with earnings in other 

jobs of similar requirements. This 

situation may occur because of 

changed technology or from faulty 

rate setting and may cause earnings 

to reach levels beyond normal 

expectations.

Salary and Commission

(See Commission Earnings.)

Salary Rate

For workers hired on a weekly, 

monthly, or annual basis, the rate of 

pay is normally expressed in terms 

of dollars per week, month, or year. 

Workers employed on a monthly or 

annual salary basis may actually be 

paid monthly, semi-monthly, or 

more frequently. Usually, the

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length of the workweek is specified 

and a policy is established for compensation in the event that longer or 

shorter hours than a full week are 

worked.

Severance Pay

CSee Dismissal Compensation.)

Sex Differential

Differences in rates paid to men 

and women in the same occupation 

for work of comparable quality and 

quantity. Where quality or quantity of output differs as between men 

and women, differences in pay are 

not necessarily differentials based 

on sex.

Shift

A term applied to a work period 

where two or more groups of workers 

are employed at different hours 

during the operating time of an 

establishment; e. g., an establishment may operate two shifts of 8 

hours each or 16 hours a day. In 

some industries, the term “ trick” or 

“ tour” is used instead of “ shift.” 

{See also Fixed Shift, Rotating Shift, 

Split Shift, and Swing Shift.)

Shift Differential

Added compensation to workers 

who are employed on a work schedule 

other than the regular daytime 

schedule. Shift differentials may be 

paid in a number of ways: (1) a 

fixed amount per hour above the 

rate paid on the regular day shift;

(2) a percentage over earnings at the 

regular day shift rates; (3) shorter 

hours with full daily pay, or (4) both 

shorter hours and additional monetary compensation above full daily 

pay.

Single Rate

A rate which is the same for all 

workers on the same job or in the 

same job classification, and under 

which the individual worker on a 

job receives the same rate during the 

entire time that he is holding the 

job. The single rate usually is paid 

to experienced workers in jobs requiring varying degress of skill. 

Learners or apprentices may be paid 

according to rate schedules which 

start below the single rate and permit 

the worker to achieve the full job 

rate over a period of time. In the 

less skilled jobs, the rates for beginners and experienced workers may 

be identical because the period of 

time necessary to become familiar 

with all phases of the work is relatively short. Individual workers 

may occasionally be paid above or 

below the single rate for special 

reasons, but such payments are regarded as exceptions to the usual 

rule. The definition of a “ job ” or 

“ classification” may be very narrow 

or very broad, and the single rate 

may therefore be applicable to as 

few as one or two workers doing 

identical jobs, or as many as several 

thousands performing a number of 

essentially different jobs which are

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nevertheless regarded as meriting 

the same rate of pay.

Skill Differential

Differences in wage rates paid to 

workers engaged in occupations requiring varying levels of skill in 

work performance. May also refer 

to differentials in rates of workers in 

the same occupation, higher rates 

being paid to those who usually 

perform the more complex tasks. 

{See also Premium Rate.)

Sound and Tested Going

Rate

{See Wage Rate Bracket.)

Special Permit Rate

A rate paid to a union worker 

who comes from another city and is 

employed under a special permit 

because of local labor shortages. 

The rate received is the same as that 

paid to a permanent worker in the 

area. In the unionized brewery 

industry, this term refers to the 

rates paid to special workers who 

are temporarily employed during 

the peak summer period. These 

rates are usually lower than those 

received by “ regular” union workers.

Spendable Earnings

In general, the money earnings of 

workers less various amounts deducted for taxes and other purposes 

from pay rolls; hence, “ spendable 

earnings” may be identified broadly 

with “ take home” earnings. Term 

also used in the sense of the earnings

available for private spending or 

saving, but this usage would include 

certain types of deductions (e. g., 

union dues) as spendable earnings. 

“ Net spendable average weekly earnings” is a series developed by the 

Bureau of Labor Statistics in which 

Federal social security and income 

taxes are deducted from gross average weekly earnings for workers 

with specified number of dependents. 

{See also Take-Home Pay.)

Split Shift

The daily working time that is 

not continuous but split into two or 

more working periods. “ Split shifts” 

are usually found in industries such 

as local transportation, which is 

affected by peaks or rush periods at 

various times of the day. {See

also Fixed Shift, Rotating Shift, 

Shift, and Swing Shift.)

Standard Rate

A basic rate of pay established for 

an occupation in a plant, industry, 

or community through collective 

bargaining, company regulation, or 

by law. May also refer to established rates for services rendered in 

a community in connection with 

maintenance and repair of automobiles, appliances, buildings, etc.

Starting Rate

{See Entrance Rate.)

Style Development Rate

Similar to temporary, experimental, or trial rate. The term is used in

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the hosiery manufacturing industry 

and relates to work on new styles 

for which no piece rates have yet 

been set. Generally, hourly rates 

are paid on such work. Usually 

these hourly rates average close to 

the workers* previous piece-rate 

earnings. The style development 

rates are in effect for a specified time 

and are then replaced by new piece 

rates.

Subm inim um Rate

A rate below the minimum established for an occupation, establishment, industry, or area by union 

agreement, law, or policy. Such 

rates may be paid to learners and to 

substandard, superannuated, probationary, or special permit workers.

Subsistence Allowance

A payment to a worker for expenses covering meals, lodging, and 

transportation while in a traveling 

status for his employer. Such allowances may be based on a fixed 

amount for meals and lodging plus 

other expenditures or on the actual 

expenses incurred for all items. 

There are also cases where institutional workers (e. g., nurses) receive 

a subsistence allowance for living 

outside the institution, since free 

room and board are incorporated 

into the wage structure.

Substandard Rate

A rate of pay below the prevailing 

or standard level for a worker whose

efficiency is impaired because of 

physical or mental handicaps. The 

term is also used to refer to rates 

below Federal or State minimum 

wage levels or below prevailing levels 

for an occupation in an industry or 

area. (See also Handicapped Worker 

Rate.)

Superannuated Rate

A rate of pay below the prevailing 

level for a worker above a certain 

age. Such rates are frequently allowed in union agreements. At 

times, the agreement requires the 

employment of a certain ratio of 

older workers at superannuated 

rates. Superannuated workers with 

long service are sometimes retained 

in an employed status because of 

their economic need; also, their 

services are sometimes sought during 

periods of labor shortages.

Supplements to Wages and

Salaries

As defined by the U. S. Department of Commerce for national 

income purposes: “ Supplements to 

Wages and Salaries is the monetary 

compensation of employees not commonly regarded as wages and salaries. 

It consists of employer contributions 

for social insurance, employer contributions to private pension and 

welfare funds, compensation for 

injuries, directors* fees, pay of the 

military reserve, and a few other 

minor items of labor income.** Term 

sometimes used more broadly to

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refer to all supplements to basic 

wage or salary rates.

Swing Shift

An extra or “ swing” shift of 

workers required in establishments 

where continuous or seven-day operations are scheduled, to provide the 

other crews with days off. The 

“ swing crew” usually rotates among 

all of the other shifts. Also refers to 

the practice o f one of three rotating 

shifts staying on the job through two 

shift periods, thus “ swinging” the 

shifts into their new assignments. 

(See also Fixed Shift, Rotating Shift, 

Shift, and Split Shift.)

Take-H om e Pay

Typically, earnings for a pay-roll 

period, less required deductions. 

(See also Spendable Earnings.)

Target

In piece-rate systems, a rate is set 

with the objective of making it possible for a worker to earn, on the 

average, 10, 15, or some other percentage above the base rate. The 

expected earnings to which the piece 

rate is geared is referred to as a 

target.

Temporary Rate

A rate set tentatively on new 

work. When new work is started 

under piece rates in some industries 

and it is not known whether or not 

the initial rates can be properly set 

for the tasks involved, temporary

rates are established. These rates 

are later revised and are made permanent when found to be satisfactory. Sometimes they are called 

“ experimental” or “ trial” rates. 

These are alternate designations in 

various industries. (See also Guarantee on Trial Rate and Protest Price.)

Tip

A gratuity given by a customer or 

patron in recognition of satisfactory 

personal service or through custom. 

Tips are considered as compensation 

by the Bureau of Internal Revenue, 

thus constituting taxable income. 

A substantial proportion of the 

earnings of some categories of workers in hotels, restaurants, steamships, and barber and beauty shops 

is realized from tips.

Tonnage Rate

Pay for a unit of work applicable 

to incentive workers, and common 

in such industries as coal mining and 

basic iron and steel, where output 

for important categories of workers 

can be measured on a tonnage basis.

Tool Maintenance Tim e

(See Allowed Time.)

Trainee

The term “ trainee” applies to 

workers who receive formal training 

for occupations requiring a limited 

degree of skill. The training may 

include some classroom work. A 

trainee differs from a learner in that 

a learner does not receive formal

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training but learns his job through 

actual performance, under 

supervision.

Travel Tim e

The time spent traveling to and 

from a designated point and place 

o f work. Such travel includes portalto-portal in mining, deadheading on 

railroads, and out-of-town work 

performed by building tradesmen, 

mechanics, musicians, etc.

Union Rate

An hourly rate, usually a single 

rate for an occupation or trade, 

established by agreement reached 

through collective bargaining. A 

union rate or scale is usually the 

minimum rate that may be paid to 

qualified persons in the job; there 

are usually no restrictions prohibiting the employer from paying higher 

rates.

Union Scale

{See Union Rate.)

Upgrading

The process of a more rapid than 

normal advancement of workers to 

jobs having greater skill requirements and commanding higher rates 

of pay. This measure is largely 

resorted to when experienced help is 

difficult to secure, as was the case 

during World War II, and when 

new work of long or permanent duration is undertaken requiring higher 

degrees of skill on the part of the 

labor force. {See also Downgrading.)

Series maintained by the Bureau 

of Labor Statistics, beginning in 1943, 

to measure the movement of wage 

rates in urban areas in manufacturing, major manufacturing industry 

groups, and selected nonmanufacturing industries.

Vacation Pay

Payment for a period o f time 

received by workers for vacation 

purposes. The time period frequently varies with length of service. 

During busy times or in a tight labor 

market, workers may be given the 

option of accepting vacation pay in 

lieu of time ofF.

Wage Advance Plan

Advancing of wages in workweeks of short duration under plans 

obligating employers to maintain 

weekly wages up to a specified minimum level. Wages must be repaid 

during later weeks in which regular 

or longer hours are worked. No 

repayment is required unless the 

employer provides sufficient work to 

enable the advance to be repaid. 

(See also Annual Wage or Employment Guarantee and Guaranteed 

Wage Plan.)

Wage Arbitration

The referral of wage disputes 

between employers and unions to an 

arbitrator or board of arbitration. 

The arbitrator's award or decision is 

customarily binding upon both parUrban Wage Rate Index

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ties. Arbitration is usually voluntary, both parties having agreed to 

refer the dispute to a third party for 

a decision. (See also Wage 

Mediation.)

Wage Assignment

A voluntary transfer by a worker 

of some of his earned wages or commissions to another party or parties. 

Such assignments may be used for 

payment of purchased goods and 

debts, purchase of savings bonds, 

and payment of union dues and 

assessments.

Wage Determination

The process o f establishing wage 

rates and wage structures through 

collective bargaining, arbitration, 

individual employer determination, 

etc. The process may involve comparisons with rates paid by other 

firms, the use of job evaluation, or 

other techniques. The term is also 

applied to findings, orders, or decisions of wage regulatory bodies such 

as minimum wage boards.

Wage Differential

Differences in wages among occupations, industries, or areas. Historical wage differentials, to which 

frequent reference is made, are those 

which have existed over long periods 

of time.

Wage Inequality

An unjust disparity between rates 

o f workers whose duties and responsibilities are similar or identical.

Wage inequalities can be considered 

either on an intraplant or interplant 

basis. The elimination of wage 

inequalities is often accomplished 

through job review or the adoption 

o f job evaluation plans. During 

World War II, the concept was a 

major basis upon which the National 

War Labor Board was authorized to 

permit exceptions from the general 

stabilization o f wages. The “ wage 

rate bracket” procedure was an 

application of the inequality policy. 

(See also Wage Inequity.)

Wage Inequity

An unjust relationship between 

the wage rates of workers or of job 

classifications. The concept was a 

major basis upon which the National 

War Labor Board was authorized to 

permit exceptions from the general 

stabilization of wages during World 

War II. (See also Wage Inequality.)

Wage Leadership

The influence exercised by the 

wage settlements reached by a large 

firm or group of firms on other settlements in an industry or labor market. 

“ Follow-the-leader” wage adjustments appear to be particularly 

significant in some industries. May 

also relate to a policy adopted by a 

firm of maintaining a position of wage 

leadership in an industry or area.

Wage Level

The level o f wages received by 

workers in an occupation, establishment, industry, or area. Wage

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levels are generally indicated by 

average rates.

Wage Mediation

The entrance of a disinterested 

third party into a wage dispute in an 

effort to effect a settlement. Unlike 

arbitration, the mediator merely 

makes recommendations and assists 

the disputant parties in reaching a 

settlement. This is the principal 

function of the Federal Mediation 

and Conciliation Service. {See also

Wage Arbitration.)

Wage Policy

A formalized practice of an establishment or industry relating to 

elements of wages, such as wage rate 

scales, shift differentials, overtime 

provisions, nonproduction bonuses, 

automatic increments, paid holidays, 

paid vacations, pensions, and insurance benefits. In a broader sense, 

criteria for wage adjustments are 

stated in terms of objectives (e. g., 

stabilization, rising standard of living, etc.) or in terms of prevailing 

economic conditions.

Wage Rate

The monetary compensation for a 

given unit of time or effort by which 

a worker’s pay is calculated. There 

are several kinds of wage rates, 

related to the system of wage payment used in an establishment. 

The principal kinds are hourly rates, 

daily rates, weekly rates, monthly 

rates, annual rates, and various 

kinds of incentive rates.

In the administration of wartime 

wage stabilization policy by the 

National War Labor Board, the 

term referred to a range of “ sound 

and tested going rates” for an occupation in a labor market area. The 

minimum of the range or bracket, 

the most important point in actual 

wage administration, was frequently 

set at the level of the first substantial 

cluster of rates in a wage distribution. The minimum of the bracket 

was the point up to which the War 

Labor Board would permit adjustments in interplant inequity cases.

Wage Reopening

A provision or clause in a union 

agreement permitting the question 

of wages to be reopened for negotiation before the expiration of the 

agreement.

Wage Review

A periodic review of the performance of workers to determine or 

select those who deserve merit 

increases or advancement to higher 

paying jobs. {See also Merit 

Increase.)

Wage and Salary Adm inistration

The managing and supervision of 

the wage structure of an employer. 

It involves the application of wage 

and salary adjustments, according 

to established policies, and the 

analysis of data such as cost of living,

Wage Rate Bracket

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prices, wage and salary surveys, 

which have a direct bearing on the 

wage structure and are used in wage 

negotiations. May also involve the 

establishment of new rates through 

job evaluation, job analysis, and 

time studies.

Wage and Salary Receipts

As defined by the U. S. Department o f Commerce for national 

income purposes: “ Wage and Salary 

Receipts is equal to wages and 

salaries less employee contributions 

for social insurance, except that 

retroactive wages are counted when 

paid rather than when earned.”

Wage Structure

The sum total of the various 

elements and considerations that 

characterize a specific rate schedule 

in an establishment, industry, area, 

or country as a whole. Typical of 

such elements are: (1) relationship 

between rates of occupations of different skills; (2) relationship between 

rates of pay for men, women, and 

workers of different races and color 

in the same occupations; (3) provisions for extra pay for late shift 

work, overtime, hazardous, unpleasant, or unhealthful work; (4) interarea and interregional variations in 

rates of pay; (5) methods of pay; 

(6) provisions for lunch and rest 

periods; and (7) supplementary 

benefits, such as vacations, insurance, 

sick leave, and holiday provisions.

Wage Survey

A general term used to describe a 

wage study based on the collection, 

tabulation, and analysis of original 

data. Wage surveys are of many 

types, and the kinds of data collected depend upon the uses to 

which the surveys are put.

Wages and Salaries

As defined by the U. S. Department of Commerce for national 

income purposes: “ Wages and Salaries consists of the monetary remuneration of employees commonly 

regarded as wages and salaries, 

inclusive of executives* compensation, commissions, tips, and bonuses, 

and of payments in kind which 

represent income to the recipients.** 

More generally, this term refers to 

remuneration to individuals for productive effort.

W aiting Time

(See Dead Time.)

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Index

Page

Account, drawing....................................... 7

Account, expense........................................ 7

Across-the-board-increase......................... 1

Adjustment, cost of living........................ 5

Administration, wage and salary............. 28

Advance on wages...................................... 1

Allowance, clothing.................................... 4

Allowance, subsistence.............................. 24

Allowed time............................................... 1

Annual earnings......................................... 1

Annual wage or employment guarantee. 1

Apprentice rate.......................................... 2

Apprentice scale......................................... 2

Arbitration, wage....................................... 26

Assessment.................................................. 2

Assignment, wage...................................... 27

Automatic progression.............................. 2

Average hourly earnings, exclusive of

overtime payments................................ 2

Average straight-time hourly earnings. .. 3

Back pay..................................................... 3

Base rate..................................................... 3

Benefit, fringe............................................. 8

Bonus............................................................ 3

Bonus, danger zone.................................... 5

Bonus, explosive trucking......................... 8

Bonus, nonproduction............................... 14

Bonus, production...................................... 18

Bootleg wages............................................. 3

Bracket, wage rate..................................... 28

Call-back pay.............................................. 4

Call-in pay.................................................. 4

Check-off..................................................... 4

Classification, jo b ....................................... 11

Clause, escalator......................................... 7

Clothing allowance..................................... 4

Commission earnings................................. 4

Commission, salary and............................ 21

Common labor rate.................................... 4

Community wage survey.......................... 5

Page

Comparable rate......................................... 5

Compensation, dismissal........................... 6

Competitive wage...................................... 5

Contract wage payment............................ 5

Contributory pension plan....................... 5

Cost-of-living adjustment......................... 5

Cutting, rate............................................... 19

Daily rate.................................................... 5

Danger zone bonus..................................... 5

Deadheading pay....................................... 6

Dead time.................................................... 6

Dead work................................................... 6

Deduction, pay-roll.................................... 15

Description, jo b .......................................... 11

Determination, wage................................. 27

Differential, historical wage..................... 10

Differential, intercity................................. 11

Differential, one-man car.......................... 14

Differential, race........................................ 19

Differential, regional.................................. 20

Differential, sex.......................................... 22

Differential, shift........................................ 22

Differential, skill........................................ 23

Differential, wage....................................... 27

Dismissal compensation............................ 6

Dismissal pay.............................................. 6

Disposable income...................................... 6

Doubleheading pay.................................... 6

Down-grading............................................. 6

Down time. ................................................ 7

Drawing account........................................ 7

Dual pay..................................................... 7

Earning level, expected............................. 7

Earnings...................................................... 7

Earnings, annual........................................ 1

Earnings, average hourly, exclusive of

overtime payments................................ 2

Earnings, average straight-time hourly.. 3

Earnings, commission................................ 4

Earnings, full-time..................................... 9

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Earnings, gross average hourly..............

Earnings, gross average weekly.............

Earnings, spendable.................................

Entrance rate...........................................

Equal pay for equal work.......................

Escalator clause.......................................

Evaluation, jo b ........................................

Expected earning level............................

Expense account......................................

Explosive trucking bonus.......................

Factor, improvement...............................

Finish-go-home basis of pay...................

Fixed shift.................................................

Flat rate (auto repair)............................

Floor under wages...................................

Fringe benefit...........................................

Full-time earnings....................................

Full-time worker rate..............................

Garnishment of wages.............................

Going rate.................................................

Grade, labor..............................................

Gross average hourly earnings...............

Gross average weekly earnings..............

Guarantee, annual wage or employment

Guaranteed rate.......................................

Guaranteed wage plan............................

Guarantee on trial rate...........................

Handicapped worker rate.......................

Historical wage differential.....................

Holiday pay..............................................

Hourly rate...............................................

Improvement factor................................

Incentive rate...........................................

Income, disposable...................................

Increase, across-the-board......................

Increase, merit.........................................

Individual rate.........................................

Inequality, wage......................................

Inequity, wage..........................................

Intercity differential................................

Job classification......................................

Job description.........................................

Job evaluation..........................................

Job rate.....................................................

Joint rate setting......................................

Journeyman rate......................................

Kick-back..................................................

Page

Labor grade................................................. 12

Leadership, wage........................................ 27

Learner rate................................................... 13

Level, wage........... ...................................... 27

List, price....................................................... 18

Loose rate.................................... 

Make-up pay................................................. 13

Mediation, wage......................................... 28

Merit increase. .............................................. 13

Minimum rate............................................... 13

Minimum wage. ......................................... 14

Money, premium........................................ 17

Money, push............................................... 19

Noncontributory pension plan................. 14

Nonproduction bonus................................ 14

Occupational rate......................................... 14

Occupational wage relationship............... 14

One-man car differential........................... 14

Out-of-line rate.............................................. 15

Overtime premium pay................................ 15

Pacesetter..................................................... 15

Package.......................................................... 15

Part-time worker rate.................................. 15

Pay, back..................................................... 3

Pay, call-back............................................. 4

Pay, call-in.................................................. 4

Pay, deadheading....................................... 6

Pay, dismissal............................................. 6

Pay, doubleheading.................................... 6

Pay, dual..................................................... 7

Pay, equal for equal work......................... 7

Pay, finish-go-home basis o f..................... 8

Pay, holiday................................................ 10

Pay, make-up................................................ 13

Payment by result........................................ 15

Payment, contract wage........................... 5

Pay, overtime premium............................... 15

Pay, portal-to-portal.................................... 17

Pay, reporting............................................. 20

Pay, retroactive.......................................... 20

Pay-roll deduction........................................ 15

Pay-roll period.............................................. 15

Pay-roll tax.................................................... 16

Pay, severance............................................ 22

Pay, take-home............................................. 25

Pay, vacation.............................................. 26

Peg point........................................................ 16

Page

9

. 9

. 23

. 7

. 7

. 7

. 11

. 7

7

. 8

. 10

. 8

. 8

. 8

8

. 8

. 9

9

9

. 9

. 12

. 9

. 9

1

9

. 10

. 10

. 10

. 10

. 10

. 10

. 10

. 11

6

1

. 13

. 11

. 27

. 27

. 11

. 11

. 11

. 11

. 12

. 12

. 12

. 12

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Page

Penalty rate................................................... 16

Pension plan, contributory....................... 5

Pension plan, noncontributory................... 14

Period, pay-roll............................................. 15

Permanent piece rate................................... 16

Perquisite....................................................... 16

Piece rate....................................................... 16

Piece scale...................................................... 16

Plan, wage advance................................... 26

P. M ............................................................... 16

Point, peg...................................................... 16

Policy, wage................................................ 28

Portal-to-portal pay..................................... 17

Premium money........................................... 17

Premium rate................................................ 17

Prevailing rate.............................................. 17

Pricelist......................................................... 18

Price, protest................................................. 18

Probationary rate......................................... 18

Production bonus......................................... 18

Progression, automatic.............................. 2

Protest price.................................................. 18

Push money................................................... 19

Race differential........................................... 19

Range, rate.................................................... 19

Rate, apprentice......................................... 2

Rate, base................................................... 3

Rate, common labor.................................. 4

Rate, comparable....................................... 5

Rate cutting................................................. 19

Rate, daily.................................................. 5

Rate, entrance............................................ 7

Rate, flat (auto repair).............................. 8

Rate, full-time worker............................... 9

Rate, going.................................................. 9

Rate, guaranteed........................................ 9

Rate, guarantee on trial............................ 10

Rate, handicapped worker........................ 10

Rate, hourly................................................ 10

Rate, incentive........................................... 11

Rate, individual.......................................... 11

Rate, jo b ...................................................... 12

Rate, journeyman...................................... 12

Rate, learner............................................... 13

Rate, loose................................................... 13

Rate, minimum.......................................... 13

Rate, occupational..................................... 14

Page

Rate, out-of-line......................................... 15

Rate, part-time worker............................. 15

Rate, penalty.............................................. 16

Rate, permanent piece............................... 16

Rate, piece.................................................. 16

Rate, premium........................................... 17

Rate, prevailing.......................................... 17

Rate, probationary.................................... 18

Rate, regular............................................... 20

Rate, runaway............................................ 21

Rate range................................................... 19

Rate, salary................................................. 21

Rate setting................................................ 19

Rate setting, joint...................................... 12

Rate, single................................................. 22

Rate, sound and tested going................... 23

Rate, special permit................................... 23

Rate, standard............................................ 23

Rate, starting.............................................. 23

Rate, style development........................... 23

Rate, subminimum..................................... 24

Rate, substandard...................................... 24

Rate, superannuated.................................. 24

Rate, temporary......................................... 25

Rate, tonnage............................................. 25

Rate, union................................................. 26

Rate, wage.................................................. 28

Real wages.................................................. 20

Receipts, wage and salary........................ 29

Regional differential.................................. 20

Regular rate................................................ 20

Reopening, wage........................................ 28

Reporting pay............................................. 20

Result, payment b y ................................... 15

Retroactive pay.......................................... 20

Review, wage.............................................. 28

Rotating shift............................................. 21

Round of wage increases........................... 21

Royalty........................................................ 21

Runaway rate............................................. 21

Salaries, wages and.................................... 29

Salary and commission.............................. 21

Salary rate.................................................. 21

Scale, apprentice........................................ 2

Scale, piece.................................................. 16

Scale, union................................................. 26

Setter, pace................................................. 15

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Page

Setting, rate................................................ 19

Severance pay............................................. 22

Sex differential............................................ 22

Shift............................................................. 22

Shift differential......................................... 22

Shift, fixed................................................... 8

Shift, rotating............................................. 21

Shift, split................................................... 23

Shift, swing................................................. 25

Single rate................................................... 22

Skill differential.......................................... 23

Sound and tested going rate..................... 23

Special permit rate..................................... 23

Spendable earnings.................................... 23

Split shift..................................................... 23

Standard rate.............................................. 23

Starting rate............................................... 23

Structure, wage.......................................... 29

Style development rate............................. 23

Subminimum rate...................................... 24

Subsistence allowance................................ 24

Substandard rate........................................ 24

Superannuated rate................................... 24

Supplements to wages and salaries......... 24

Survey, community wage.......................... 5

Survey, wage............................................... 29

Swing shift.................................................. 25

Take-home pay........................................... 25

Target.......................................................... 25

Tax, pay-roll............................................... 16

Temporary rate.......................................... 25

Time, allowed............................................. 1

Time, dead.................................................. 6

Time, down................................................. 7

Time, tool maintenance............................ 25

Time, travel................................................ 26

Time, waiting.............................................. 29

T ip................................................................ 25

Tonnage rate............................................... 25

Tool maintenance time.............................. 25

Trainee......................................................... 25

Page

Travel time........... ............... 26

Union rate................................................... 26

Union scale........... ...................................... 26

Upgrading.................................................... 26

Urban wage rate index.............................. 26

Vacation pay............................................... 26

Wage advance plan.................................... 26

Wage arbitration........................................ 26

Wage assignment........................................ 27

Wage, competitive..................................... 5

Wage determination................................... 27

Wage differential........................................ 27

Wage increases, round o f.......................... 21

Wage inequality......................................... 27

Wage inequity............................................. 27

Wage leadership......................................... 27

Wage level................................................... 27

Wage mediation......................................... 28

Wage, minimum......................................... 14

Wage plan, guaranteed............................ 10

Wage policy................................................ 28

Wage rate.................................................... 28

Wage rate bracket...................................... 28

Wage rate index, urban............................. 26

Wage relationship, occupational.............. 14

Wage reopening.......................................... 28

Wage review................................................ 28

Wages, advance on ..................................... 1

Wage and salary administration.............. 28

Wage and salary receipts.......................... 29

Wage structure.......................................... 29

Wage survey................................................ 29

Wages and salaries..................................... 29

Wages, bootleg............................................ 3

Wages, floor under..................................... 8

Wages, garnishment o f.............................. 9

Wages, real.................................................. 20

Wages and salaries, supplements to. . . . 24

Waiting time............................................... 29

Work, dead.................................................. 6

34 U. S. GOVERNMENT PRINTING OFFICE: 1980

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