An hourly employee is a worker whose employer pays them for the number of hours they work per week.
Unlike many salaried employees that receive the same amount of money each pay period regardless of the number of hours worked, an hourly employee’s wages can vary depending on fluctuating weekly schedules or shifts.
The employer determines the number of hours an hourly employee works each week and the pay rate. The hourly employee will often use a time card system or timesheet to keep track of the number of hours they work.
An hourly employee can work part-time or full-time.
How much do hourly employees get paid?
Hourly employees get a pre-determined hourly wage set by their employer, and they can earn overtime and bonus pay for any time worked beyond the usual 40-hour workweek.
Depending on the country and state, most labor laws stipulate that hourly workers receive at least the minimum wage.
When do hourly employees get paid?
Employers can pay hourly workers at the same frequency as salaried workers. Pay schedules might include weekly, biweekly, semimonthly or monthly.
Do hourly employees get paid for overtime hours?
Yes. Most national countries have overtime laws requiring hourly employees to receive pay for overtime hours.
In the US, for example, the fair labor standards act (FLSA) considers workers operating on an hourly basis as non-exempt employees. Non-exempt means hourly employees are not exempt from overtime pay because they do not earn over $35,568 per year. Employers must therefore pay non-exempt workers time and a half for all extra hours worked over 40 hours of work in a given week.
In contrast, salaried jobs should receive a salary above $35,568 per year, which means they are exempt from overtime pay even if they work over 40 hours a week.
Do hourly employees get benefits?
While traditionally, employers reserved employee benefits and perks for full-time salaried employees, nowadays, many companies choose to provide both salary and hourly employees access to the same benefit packages and bonuses.
In the US, hourly workers who achieve full-time status—meaning the hours they work are equal to the number of hours typically worked by a full-time employee—are entitled to the same benefits as salaried workers. Benefits include health insurance, life insurance, paid time off (PTO), retirement plans, and more.
Annual salary vs. hourly pay
The key difference between this type of work and a salaried job is that an hourly position can offer great flexibility and choice over when, where, and how much you work. In contrast, salaried employees typically receive more benefits and greater stability.
For employers, knowing the differences between hourly workers and those in salaried positions working on a salary basis is key to ensuring they compensate employees correctly and allocating work properly across teams.