What is the reason for an employer to have some employees on hourly and some on salary?
For the employer, what are the advantages and disadvantages of the two?
What is it about a particular position that dictates which one the employer chooses?
In: 2
Broadly speaking, non-exempt (hourly) employees are paid for the value of their time, while exempt (salaried) employees are paid for the value of their position.
Having been both in the past, and being both now (I have a part-time hourly job), the primary difference I noticed is that as an hourly employee, I am judged by my productivity, and once I leave work, I really don’t think about it. As a salaried manager, I was pretty much “always” fretting over work to some degree, bringing it home with me, and it wasn’t unusual or me to have to sacrifice nights or weekends to get a project completed. I never bother to check my email for my hourly job once I am off the clock, whereas for my salaried position I am sort of always connected, and am expected to respond to the occasional evening or weekend email, even the rare phone call. Yes, I can leave work at 2 pm, but it also isn’t unusual for me to be working on my couch at 8 pm.
If you are an employer and you want to produce X amount of a given product in a day, you really want the certainty and predictability that hourly employees provide you, along with the incentive of overtime should you decide that you need to produce more. But to oversee those employees, you really want a salaried supervisor or manager who owns the process and feels vested in ensuring that the goals are met or exceeded.
There are some extremely well-paid hourly positions: air traffic controllers come to mind. My sister made $200K a year doing that at the end of her career, but when she punched out every day, she was done… She never had to check her email at night or anything.
And of course there are some demanding but low-paid salaried jobs: teachers can put in some long hours, grading papers or preparing lessons at night. People often mistake being salaried as a sign of prestige, but it is often just an easy way for an employer to take advantage of an employee. “Exempt”, after all, means exempt from certain rights guaranteed by law, such as overtime.
Edit: another right that hourly employees enjoy that salaried do not are breaks: they’re legally mandated, often two ten-minute breaks and a half-hour for lunch. Salaried employees don’t enjoy any such guarantee. Don’t get me wrong, I would take an occasional break as a salaried manager, but wouldn’t make a fuss over it as my hourly employees would; they would say “break time!” at the same time every morning, would usually remove themselves from their workspace, and I just sort of knew not to mess with them at that time. As a salaried employee, I would feel obligated to take a call during lunch, and could never tell anyone that I couldn’t help them because I was “on break”.
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