Hourly Employee

What is an hourly employee? 
 

An hourly employee is someone who is paid for the actual number of hours that they work per period. Their rate per hour is a predetermined rate that is agreed upon by the employer and the employee before work starts. 

Hourly employees are required to be paid the minimum wage. Presently, the federal minimum wage is $7.25 per hour. However, this figure can also vary depending on the state. There are U.S. states that have set a minimum wage that is higher than the federal minimum wage. In case of an overlap, the employer must pay that which is higher and is more favorable to the worker. To know more about the minimum wage in your state, you can check with your state labor office. 

To validate the number of hours that they work, hourly employees need to document their work hours via a time card system. The time card is checked and approved by the employer before payroll processing. To get an idea of how wages are computed, multiply the hourly rate by the number of hours worked for a pay period. For instance, let’s say you are paid $10 an hour and you worked a total of 25 hours for the week. Multiply $10 by 25 and you will get $250 which is your gross pay for the week.

How many hours do hourly employees work per week? 
 

The number of hours that an hourly employee must work per week is set by the employer. There is no federal law that sets a standard on the number of hours to be worked per week. However, employers are legally required to provide overtime pay to hourly workers. According to the Fair Labor Standards Act (FLSA), overtime pay for non-exempt employees should not be less than time-and-a-half (1.5x the employee’s normal hourly wage) for hours worked over 40 hours per week.

How does an hourly employee differ from a salaried employee? 
 

Hourly employees, as we have mentioned, are paid for the actual number of hours that they work in a pay period. They are entitled to overtime pay for each hour that they work over 40 hours per week. On the other hand, salaried employees are paid a fixed, regular salary regardless of the number of hours that they worked. This means that, even if they work less than 40 hours a week or more than 40 hours a week, they will still be paid the same wage. 

Also, hourly employees are paid only for the actual hours that they worked. Because of this, their work hours may vary depending on their scheduled weekly work rotation or shift. For salaried employees, they get a fixed wage no matter their work schedule. 

Do hourly employees have benefits? 
 

Benefits packages offered to hourly employees are determined by the employer. Usually, hourly employees who work full-time are offered benefits such as sick time, vacation, life insurance, health insurance, retirement plans, and more. According to the Affordable Care Act (ACA) and the Internal Revenue Service (IRS), an employee who renders paid work for at least 30 hours per week or 130 hours per month is classified as full-time.