When it comes to salary laws versus hourly employees the laws are created by the U.S. Department of Labor in the Fair Labor Standards Act of 1938. While the rules are created by the U.S. Department of Labor is the Fair Labor Standards Act of 1938, they are enforced by the Wage and Hour Division. The Wage and Hour division are also the people that investigate things like employee claims, and unfair practices such as minimum wage, OT, working hours and more. If you ever wondered about the differences between salaried and hourly employees or you are in one position offering one type of pay and are being offered another position for another type of pay, it’s a good idea to do some research and get familiar with the rules for each position, as well as labor laws. Below, we will be going over the law, the two types of employees that work in house, differences between salaried and hourly employees – the good and the not so good, as well as who enforces the laws and what can be done if you find that certain laws or rules are being broke.
When it comes to your job, you are probably one of two types of employee. You are either an exempt employee or you are a non-exempt employee. The biggest difference when it comes to these two types of employees is that except employees do not get over time or paid for over time. On the other hand, as you would have guessed it, non-exempt employees DO get paid for overtime and can get overtime. The way you are put into one or the other categories is decided by your working title, the role you have in a business, your duties in that role and what your responsibilities are. Sometimes it will also depend on the salary you make / hourly wage you make or who owns the company you work for. For instance, an exempt employee usually has non-manual labor and a non-exempt employee usually does.
As one would expect, there is a huge difference between a salaried employees versus an hourly employee. Frankly, depending on how you look at it, each position has its own benefits and disadvantages, but I guess it really depends on you the worker and what you want/expect as far as pay goes.
A salaried employee must be classified as a salary employee when they earn at least $455 each work week. Some of the salaried employees can get over time and others cannot, this is more about the company you work for rather than anything else. A salaried employee will receive a fixed amount of money for the job they perform. On one hand a salaried employee has the benefit of knowing they can and will earn a certain amount of money a month. However, if this employee is salaried but cannot earn over time, they may be working more hours than usual and they will NOT get paid for those hours. It’s a double edged sword of sorts. If a salaried employee does get over time they will earn 1.5 times their hourly rate if they work over 40 years a week.
Hourly employees are subject to the federal minimum wage laws. As of 2009 all employers must pay $7.25 per minimum wage (or more). Even if the state mandated wage is lower, they are obligated to pay the higher wage of $7.25. Most of the states in 2015 do pay over $7.25 though, so it’s sort of a win win if you are in a state where the minimum wage is less than $7.25 and you are paid hourly. It should be noted however, that there is an exception to the rule. If you are a tipped employee, such as a waitress/waiter, bartender, busboy/busgirl, etc. you are only required to be paid $2.13 according to federal wages. However, as stated on the FLSA website “if a tipped employee’s average wage — including tips — falls below the $7.25 minimum, the employer has to make up the difference.” Hourly employees can also get over time, except this time it’s mandatory, and it’s 1.5 times their usual regular hourly wage.
As with all things that deal with the state or federal government, there are people who enforce these laws mentioned above. If you are not being paid fairly, or if you feel that your employer is paying you in a manner that is not justified, you can contact the Wage and Hour Division by visiting the US Department of Labor. The US Department of Labor will carry out an investigation in the complaint you have and they will be reviewing a variety of financial statements from the employer; this will probably put you more in the spotlight than you would want, but you may be able to do this anonymously if necessary. Once the Us Department Of Labor goes through all the financials for that specific company you have reported, then you will be contacted and be told whether anything was found or not and what you can do about it. In almost all of the cases though, it’s less about you trying to get a case against them and more about the US department of labor fining that company or they will receive some sort of a penalty.
If you are not sure about your employment rights, you can consult with an employment lawyer in your area.