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What Is Hourly to Salary?

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Hourly Employee to Salary Employee Occurs Often in Manufacturing

Hourly Employee to Salary Employee Occurs Often in Manufacturing Jobs

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Definition:

In organizations where hourly and salary employees are employed, people view a move from an hourly or nonexempt position to a salary or exempt position as a promotion. Is such a move right for an employee?

Most frequently: yes. But, the employee who receives or seeks such a position change needs to analyze the positives and potential negatives. Foremost is the fact that salary employees are not generally eligible for overtime pay as defined by the Fair Labor Standards Act (FLSA). So an hourly employee who moves to a salary position needs to consider this impact on their paycheck.

Usually the salary position pays enough more than the hourly position to make the loss of overtime pay inconsequential – but sometimes not. Additionally, hourly employees may have benefits, particularly in a union represented workplace, that salary employees don’t have.

Alternatively, many salary jobs have perks that hourly employees do not have. These include more flexible schedules, leaving for doctor and other appointments without losing pay, and the ability to work remotely. So the hourly employee needs to consider the whole compensation and benefits package before accepting the new job. There are likely advantages and disadvantages to each.

Organizations have different expectations of salary employees. Hourly employees are paid hourly to produce a product or perform a task. Salary employees have a broader job description that involves accomplishing a whole job usually with goals and outcomes that are less measurable.

The hourly employee is paid for each hour worked with over time and even time and a half per hour for holidays at many employers. The salary employee is expected to work the hours necessary to complete the job, no matter how many.

Certain differences exist because of the nature of the work, too. An hourly employee is finished with work when he or she goes home. There are no further expectations off the clock. The salary employee thinks about the job frequently in the evening and on the weekend and may work on email at 10:00 at night.

In a participative, empowering work environment, the lines between salary and hourly functions blur with respect to responsibilities. But, an hourly employee moving to a salary job most frequently takes on the responsibility for the department they may formerly have just worked in. Or, they take on the new responsibility of managing people who many times are their former coworkers.

In another scenario, the hourly employee moves into a salary role that requires decision making and autonomous actions. An individual who is used to a job in which most actions are predefined may struggle with the responsibility of the new role - or he or she may revel in it.

Whatever the comfort level, the employee who moves from an hourly to a salary role will spend time adjusting to the new expectations. But, many thousands of employees have made the transition.

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