When hiring an employee, you must make a lot of decisions. One of the most important is whether you will offer them a salaried or hourly position.
Salaried employees are usually paid the same amount each pay period, based on their total salary. An hourly worker, on the other hand, earns a set payment for each hour they work. For example, if they earn $20 per hour and work eight hours in a day, they would earn $160 for that day (before taxes).
There are pros and cons to both options. Knowing the differences between them and the laws that govern them will help you make this decision.
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A salaried employee gets paid a set amount based on an annual salary they agreed upon with the employer. The employee’s pay is based on a 40-hour workweek. However, even if they work more or less than 40 hours in a given week, they will still earn the same amount. For this reason, salaried workers are not eligible for overtime pay. You may have a weekly, biweekly, semimonthly or monthly pay schedule for them.
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