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Jan08

Hourly vs. Salaried non-exempt

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What is the difference between an hourly employee and a salaried non-exempt employee?

Thanks

Thanks for an excellent question!

There are very few differences between an hourly and a non-exempt salaried employee. Basically, a non-exempt salaried employee is paid a weekly salary, rather than an hourly wage. This is usually done for the employers convenience, in figuring payroll.

For example, Kate has an insurance office that employs 4 people. The office is open 40 hours per week, and all the employees work those same 40 hours almost all the time. Rather than use timecards and tabulate payroll every week, it is easier for Kate just to put all 4 of the office workers on salary. They are each paid the same amount every week. Instead of paying the receptionist, Tina, $10 per hour, Kate pays her $400 for a 40-hour week.

However, because three of the four employees are non-exempt, they are entitled to overtime when they work more than 40 hours in any payroll week. In addition, if the employees work less than 40 hours in a payroll week, their salary can be adjusted accordingly. If Tina works 41 hours one week, she is entitled to one hour of overtime at $15 per hour. If she only works 39 hours one week, she is entitled to only $390 for the week.

By contrast, an exempt salaried employee is entitled to the same weekly salary, regardless of how many or how few hours the employee works in the week. (There are a few exceptions. You will find them if you search our archives for: exempt.) Kates office manager, Mark, is an exempt salaried employee earning $600 per week. When Mark works 31 hours per week spread over 5 days, he must be paid $600 per week. When he works 60 hours per week, he still earns $600 for that week.

Some unscrupulous employers try to avoid overtime by putting every employee on salary, but it does not work that way. Exempt or non-exempt status is determined by the employees primary job duties, not by how payroll is calculated. We just explained that a bit more throughly, a few questions ago. Look for the title exempt/non-exempt.

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This entry was posted on Thursday, January 8th, 2009 at 12:57 pm and is filed under
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6 Responses to “Hourly vs. Salaried non-exempt”

  1. rob adolfson Says:
    November 4th, 2009 at 7:29 pm

    I am a tv cameraman for a major cable network. I am employed by a production company of about 40 employees. Of these 40 employees there are 7 about contractual on air talents. There are 3 cameraman. When i was hired I was told that I was salaried non exempt. This was due to the fact that my job is extremely physically demanding. I carry a 24+pound camera on my shoulder 8-12 hours a day on average. I need to know what the Tennessee law states about my status. Should I be salaried exempt or non exempt. They dont give me comp time officially and definitely NO OVERTIME. There are many occasions that we travel and work many weekends(12-15 hr each day). Is the employer required to comp time or overtime? So in recap do we need to be salaried exempt or non exempt due to the strenuous job activities that we perform each and everyday?

  2. Caitlin Says:
    November 4th, 2009 at 10:34 pm

    Hi rob! This is a matter of federal, not Tennessee law. From your description of job duties, you are legitimately a non-exempt employee. That means you are entitled to overtime when you work more than 40 hours in the payroll period — even if you are normally paid a salary. Comp time is not lawful for private businesses. HTH, and thanks for reading the blogs!~Caitlin

  3. CATHY MCKENZIE Says:
    January 22nd, 2010 at 5:21 pm

    If a salary non exempt person misses work and they are out of personal days and vacation days can you dock their pay?

  4. Caitlin Says:
    January 22nd, 2010 at 9:24 pm

    Hi CATHY! Yes, an exempt or non-exempt employee can be docked under those circumstances, if they miss one full day of work or more. HTH, and thanks for reading the blogs!~ Caitlin

  5. Ginger Rausch Says:
    March 1st, 2010 at 10:53 am

    Can a salary exempt or salary non-exempt be docked for partial days when they are out of personal or vacation days?

  6. Caitlin Says:
    March 1st, 2010 at 12:01 pm

    Hi Ginger! A non-exempt salaried employee can be docked for partial workdays missed. An exempt employee cannot. HTH, and thanks for reading the blogs!~ Caitlin

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