{"id":194078,"date":"2021-03-10T06:41:31","date_gmt":"2021-03-10T11:41:31","guid":{"rendered":"https:\/\/www.attendancebot.com\/blog\/?p=194078"},"modified":"2021-08-31T06:25:45","modified_gmt":"2021-08-31T10:25:45","slug":"salary-vs-hourly-structure","status":"publish","type":"post","link":"https:\/\/www.attendancebot.com\/blog\/salary-vs-hourly-structure\/","title":{"rendered":"Salary vs Hourly: What’s Best for Your Business and Employees?"},"content":{"rendered":"

There are several aspects to keep in mind for both potential employees and companies before entering into an employment contract. For any employee, salary is one of the most important considerations within that contract. As HR Managers, it makes sense to dig deeper into salary as a factor for <\/span>employee engagement<\/span><\/a>.\u00a0<\/span><\/p>\n

The salary structure is decided upon by employers before hiring candidates. Some employees may want to be paid by the hour, and others find a salary better.\u00a0<\/span><\/p>\n

So, what are the differences between getting a monthly <\/span>salary vs hourly payment? The following article will dive deeper into both payment structures for employees and companies.\u00a0<\/span><\/p>\n\n

Salary vs Hourly Employees\u00a0<\/span><\/h2>\n

Salary vs hourly pay is quite different and varies from company to company and from employee to employee. The federal guidelines also differ for salaried vs hourly employees. Some companies may allow employees to choose between the two depending on the flexibility they want in their work hours and whether they want overtime or paid time off.\u00a0<\/span><\/p>\n

Who Is a Salaried Employee?\u00a0<\/span><\/h3>\n

A salaried employee earns periodically based on a fixed annual pay. The frequency of this payment can be weekly, biweekly, or monthly. Most companies usually have a 40-hour workweek mandate. It means that a person can work 40 hours or more, but they will get paid the amount determined initially in their contracts. The employment contract stipulates the minimum work hours required.\u00a0<\/span><\/p>\n

Salaried employees may work extra hours, overtime pay is not a common perk. But salaried employees do have additional benefits like paid time off, 401k retirement plan, and short-term disabilities. These benefit packages are usually different for different companies.\u00a0\u00a0<\/span><\/p>\n

Who Is an Hourly Employee?<\/span><\/h3>\n

To put it simply, an hourly rate is paid to hourly employees. It means that they can work for a certain number of hours and get paid for the exact hours they worked. They can expect payments at the same frequency as any salaried employee, but the amount varies depending on the number of hours they worked. They get the federal or state minimum wage rate – whichever is higher.\u00a0<\/span><\/p>\n

Hourly employees also receive overtime pay equal to one and a half times their salary. The number of hours they work isn’t guaranteed unless there is a labor contract. Hourly employees may also get benefit packages, but it depends entirely on the company. They are also required to track the number of hours they work through a <\/span>time tracking solution<\/span><\/a>, which the company later verifies while making payroll.\u00a0<\/span><\/p>\n

Hourly employees can work part-time or full-time. The pay rates and benefits that they receive in each case differ.\u00a0<\/span><\/p>\n

Exempt vs Non-Exempt Employees<\/span><\/h2>\n

Salary vs hourly employees have different exemption criteria. Hourly employees are non-exempt employees. They get paid on an hourly basis, and they are eligible under the provisions of the Fair Labor Standards Act because of the nature of their work.\u00a0<\/span><\/p>\n

But for salaried employees, the case is a bit different. They can be both exempt and non-exempt. If salaried employees get the minimum wage set by the FLSA, they may be exempt from overtime pay. But if the company pays them a wage lower than the federal minimum, they are non-exempt employees.\u00a0<\/span><\/p>\n

Administrative\u00a0<\/span><\/h3>\n

Administrative employees are predominantly in people management roles. They exercise their judgment independently, without the interference of another person. Administrative employees keep the business running, and their operations are mainly in the field of education. Examples of exempt administrative employees are Human Resources and Benefits Management.\u00a0<\/span><\/p>\n

Professional<\/span><\/h3>\n

Employees falling under this category have a job of an intellectual nature, and they exercise independent judgment and discretion. Qualified fields are accounting, teaching, architecture, and engineering. These employees use advanced knowledge in certain areas, and their work is different from manual labor. Some examples of such professionals are teachers, legal professionals, architects, medical professionals, etc.\u00a0<\/span><\/p>\n

Employees in Computer-Related Occupations\u00a0<\/span><\/h3>\n

The employees under this category are hired as computer systems analysts or software engineers, and they have a salary higher than $684 per week or $27.63 per hour. Their job requires them to design, create, and modify computer programs. These employees are primarily engaged in skilled information technology roles.<\/span><\/p>\n

\"Salary<\/p>\n

Executive\u00a0<\/span><\/h3>\n

The employees who fall in this category have to interview, select, and train new employees. They also handle employee grievances and enforce discipline. They must direct the work of two or more full-time employees. Often they have the authority to hire, fire and promote employees. Their primary duty is the management of employees.\u00a0<\/span><\/p>\n

Outside Sales<\/span><\/h3>\n

These employees work away from the company’s place of business. Their job includes sales, exchange, contract to sell, consignment for sales, or shipment for sale. They also promote the business, which may or may not be exempt, depending on specific circumstances. In this case, drivers who deliver products can be exempt. Several factors need to be considered for this exemption.\u00a0<\/span>For example, any contractual agreements related to the volume of products delivered should be considered.\u00a0<\/span><\/p>\n

To read the linked blog to understand more about the <\/span>difference between exempt and non-exempt employees<\/span><\/a>.\u00a0<\/span><\/p>\n

Salary vs Hourly Pros and Cons: Which One is Better?\u00a0<\/span><\/h2>\n

Is Salary Better Than Hourly?\u00a0<\/span><\/h3>\n

Pros of Salaried Employees:\u00a0<\/span><\/h4>\n