Salary vs Hourly: Which Is Better? Insights From A Recruiter

Wondering what being on a salary is? Or wondering what being paid hourly is? And lastly, wondering which is better? We’re going to answer all of these questions in this quick guide.

Let’s first dig into what the basic understanding is of being on a salary or being paid hourly.

What Is Being Paid On A Salary

Being paid on a salary is when you are compensated a fixed amount per year, which is usually divided into bi-weekly portions that are paid to you. Salary compensation means that you are not fixed to working any certain number of hours. You are measured and compensated based on your merit and the completion of your work.

This does mean that if you were to work late on a Friday night, you wouldn’t receive any additional compensation for your efforts.

What Is Being Paid Hourly

Being paid hourly is when your compensation is based on a fixed hourly amount and the amount of time you spent on the job. Usually, hours will be tracked by your employer when you are paid hourly. Federal law states that if you work more than 40 hours per week for a company that they must pay you overtime compensation.

Just like in our previous example, this means that if you were to work late on a Friday night (and those hours extended beyond 40 works per week) that you would have to receive overtime compensation.

How Many Hours Can I Work When Paid Hourly

There are two questions that are often asked, can an employer make you work more than 12 hours a day? And can an employer make you work more than 16 hours a day?

Working More Than 12 Hours A Day

The short answer is yes. Your employer can make you work more than 12 hours per day. According to the Fair Labor Standards Act or FLSA (29 U.S.C. § 201 and following), the federal overtime law, there is no limit on the number of hours that your employer can make you work. And by refusing to work this overtime, the employer does have the right to terminate your employment.

Working More than 16 Hours A Day

Again, the answer is yes. If you don’t have any restricted working hours in your employment agreement, then you might have to work long hours if asked. The Fair Labor Standards Act or FLSA does enforce proper meal breaks and working breaks. If you are concerned that you are being overworked, be sure to speak with your employer about their break policy during overtime.

Which Is Better: Salary Or Hourly?

While both have their advantages and disadvantages, the better option is going to be salary. Hourly workers are often at more will of the job market. If the employe loses a contract, the employee loses a job. That instability is difficult to deal with. Additionally, by being on salary compensation you are usually provided a significant number of benefits (healthcare, dental, eye care, bonus compensation or other).

Hourly workers are subject to frequent job adaptability challenges. While salaried workers feel more security with their employment.

If you have the option, speak with your employer about becoming a salaried worker. You might be surprised how many employers would be open to the discussion of transitioning from hourly wages to annual wages as it pertains to your employment arrangement and compensation package.

author: patrick algrim
About the author

Patrick Algrim is an experienced executive who has spent a number of years in Silicon Valley hiring and coaching some of the world’s most valuable technology teams.

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