Future Business Leaders of America (FBLA) Accounting Practice Test

What can affect the amount of wages earned by an employee?

1. The employee’s tenure at the company

2. The company’s profit margins

3. The hours worked and the rate paid per hour

4. All of the above

The correct answer is: The hours worked and the rate paid per hour

The amount of wages earned by an employee is primarily influenced by the hours worked and the rate paid per hour. This relationship is fundamental in determining an individual’s pay. For example, in hourly wage positions, the total wage is calculated as the product of the number of hours worked and the hourly rate. If an employee works more hours or if their hourly rate increases, their total wages will also increase accordingly. In many employment structures, this is the most direct and tangible way that wages fluctuate. Other factors, like tenure or company profit margins, might indirectly affect wage rates over time, but they do not result in immediate changes to individual wages at the given moment of calculation. Thus, while tenure and company performance might play roles in negotiations or future raises, the immediate impact on wages is most directly related to the combination of hours worked and the rate paid per hour.