Hourly vs Salary: Advantages, Disadvantages and Opportunities

In a battle of hourly vs salary, which prevails? We take a look at the advantages and disadvantages of each.

It can seem more prestigious to be in a salaried position, maybe more because of what it used to mean that because of what it means now. It used to mean white collar, benefits, an office. Some salaried positions still offer those things but they’re not automatic.

How Many Hours?

This is the big question when you’re considering hourly vs salary. In some cases, employees are exempt from overtime laws, including commissioned salespeople, drivers, farm workers, and administrative, executive, and professional employees. This is the sticking point because many of you reading this would be classified as one of those last three.

Currently, even salaried employees who make less than $23,660 per year are eligible for overtime. The Department of Labor is considering changing that to make anyone, even those once considered exempt, earning less than $50,440, eligible.

If you’re a non-exempt hourly employee, you are paid time and a half, your hourly rate multiplied by 1.5 for every hour you work over forty in a week. Sometimes employees are paid double time, your hourly rate multiplied by 2 for holidays and weekends.

Some unscrupulous employers will dangle the offer of a salaried position to hourly employees, counting on the employee believing a salaried position is beneficial for all those perks we talked about above. But it might be a trap.

It might be the exact same job for the same pay only know with additional duties and hours that they don’t have to compensate for.

Some employers will forbid hourly workers to work more than forty hours per week, expecting exempt employees to pick up the slack, essentially uncompensated for the additional work and hours.

Hourly workers will have more restrictions on their time, you may have to clock in and out at the start and end of each shift as well as during breaks. Understandable certainly but having to clock out when you need to do a ten-minute errand or grab a cup a coffee, or go to the bathroom can start to feel like being micro-managed. It’s not actually legal to not pay you for those kinds of breaks. A break 5-20 minutes long has to be paid but some employers don’t know that or do know but hope that you don’t.

Benefits

Some hourly employees will have access to benefits but you’re more likely to have them if you’re salaried. Currently, if you’re employer has more than fifty full time employees and you work 30 or more hours per week or 130 a month, you are eligible for employer sponsored health insurance.

Given how stingy most companies with time off since, in America the only people with any legally mandated, paid vacation is Congress, paid vacation is a big “perk” to consider when choosing between jobs. A salaried job is more likely to include paid time off and paid sick leave than hourly.

Where Are You In Life?

Hourly might be better for younger people just starting their career. You have more time to work and probably need the extra income that time and a half will offer.  When you have a family, working long hours and weekends will be less appealing.

Scheduling

Salaried employees tend to have more regular schedules than hourly employees. If you’ve ever had an hourly job where you didn’t know your schedule week to week, you know what a draw back this is. Trying to schedule things like doctor’s appointments, child care, and going back to school while you work is almost impossible withou...

Learn more about your ad choices. Visit megaphone.fm/adchoices