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Hourly vs Salary: Advantages, Disadvantages and Opportunities

Hourly-Vs.-Salary

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.

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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.

Hourly-vs-Salary
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.

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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 without a consistent schedule.

However, if you don’t want to come in (and wake up) a minute before your start time and want to bolt the second the clock strikes the end of your shift, hourly might be more appealing. Most employers will do what they have to in order to avoid paying overtime and that means they won’t ask you to work extra hours, they’ll ask a salaried employee to do it.

Flexibility

If you want some flexibility at your job, salary is probably the way to go. Need to leave in the middle of the day for a doctor’s appointment? No problem. Want to work from home a day or two a week? Go ahead. Hourly employees are less likely to be afforded that flexibility.

Feeling More Valued

A salaried position can make you feel more valuable to the company. Whether it’s true or not, many people associate hourly work with expendable employees because many hourly jobs are still low paid and low skill.

When I first moved to New York I worked for Sotheby’s. Rather I worked at Sotheby’s. I did all of the stuff other employees did and I was hired by Sotheby’s but was technically employed through a contracting company. It always made me feel second tier.

Being salaried may also entitle you to things like bonuses and annual raises that an hourly employee won’t be eligible for. A salaried position can also put you on a different “track” with more opportunities for mentoring and advancement.

Lunch Breaks

This one might seem silly but it’s not! Hear me out. Only one in five employees take a lunch break. That’s bad, for you and your company. You’re more productive when you’ve had a break. Ever try to concentrate when you’re hungry or when you feel sick from gobbling down your food too quickly? Not great for getting through the second half of the day.

Having lunch with co-workers is a good way to net work and bounce ideas off each other. Sometimes a problem you’ve spent too long going over in your head has an obvious solution once you’ve talked it out a bit.

It’s better for your health too. You eat too much when you’re distracted while eating and the kind of things you can easily eat while you work, a candy bar, a bag of chips, are worse for you than something you need a plate and utensils to eat.

As an hourly employee, you will have a more set lunch break. You might even be required to clock out for it so that whole time is your own.

Work Life Separation

People are reachable all hours of the day and night and even while on vacation thanks to smart phones and e-mail. I dated someone who literally never left the house without his Blackberry. And if he somehow did forget it, we had to go back for it. If he got a notification, he did not ignore it. Because he couldn’t. Thing was worse than an ankle monitor.

A salaried employee is more likely to be expected to be in this kind of constant contact with the office than an hourly one. While most of us don’t mind answering the odd question from work now and then, it can get exhausting and intrusive.

Weigh Your Options

There isn’t a clear winner here that works in every case. Remember, money shouldn’t be the only thing you base any decision on. And even if one offer seems like more money, that’s not always the case when you start crunching the numbers. Decide what’s important to you and do the math.

Show Notes

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