How to decide Salary Vs. Hourly

How do I differentiate between deciding if an employee should be a salary employee or an hourly employee? Right now we only have four (myself and other owner included) employees that are salary, but I would like to give two more employees more responsibility and have them salaried with the expectations that they would be in the office during the entire 9 hours that the business is open to the public in order to fulfil these added responsibilities.

1 answer  |  asked Apr 6, 2003 2:24 PM [EST]  |  applies to Illinois

Answers (1)

Aaron Maduff
How to decide Salary Vs. Hourly

So long as they are employees it doesn't really make a difference. If you put them on a salary and they are not by virtue of their duties exempt under the Fair Labor Standards Act, you will still have to pay overtime for any hours worked beyond 40, you would simply divide the employee's salary by hours to determine his/her hourly wage for use in overtime calculations. So in the long run it doesn't make much difference. Although I would suggest that using an hourly might make computations easier. But without further information on what people are doing, it is hard to determine whether they are exempt or not. This is the kind of thing we usually would do with a consultation. Good luck.
Aaron Maduff

posted by Aaron Maduff  |  Apr 6, 2003 8:22 PM [EST]

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