Salaried Employee

A salaried employee receives a fixed, regular payment for services rendered. Here’s what you need to know about their working hours, payment, and differences from hourly and exempt employees. 

What Is A Salaried Employee? 

In essence, a salaried employee receives a regular and fixed payment regardless of how many hours they have worked for the week. Hence, if the agreed-upon hours are 40 per week, a salaried worker would still receive the same payment even if they work less than 40 hours in some weeks. 

In most cases, the salary is paid in equal instalments (weekly, monthly, etc) and does not include overtime pay and performance bonuses. But, of course, this definition can vary depending on the labour law requirements. 

For example, in the US, a salaried employee is usually not offered overtime pay even if they work beyond the standard 40 hours (unless they are non-exempt employees). The UK has an almost similar framework since employers are not required to pay their workers for working overtime.  In the Philippines, a salaried employee is entitled to overtime pay according to the law (with some exceptions). However, the challenge lies in tracking the hours worked. 

Salaried vs Hourly Employees

Below are the main differences between a salaried employee and an hourly employee:

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Is a Salaried Employee The Same As an Exempt Employee?

A salaried employee receives a fixed payment regardless of the hours worked, but that doesn’t automatically disqualify them from overtime pay. In some countries, it depends on whether or not they are exempt or non-exempt employees. 

Exempt Employees 

An exempt employee works a white-collar job and is exempt from receiving overtime pay. However, there are criteria to be classified as an exempt employee. These criteria are often laid out in the employment laws of the country where you operate your business and usually include above minimum salary requirements and certain duties (managerial, administrative, etc.)

Non-Exempt Employees

Non-exempt employees are those that do not meet the criteria for exempt employee classification. Non-exempt employees are entitled to overtime pay even if they are salaried. 

This means if a salaried employee is non-exempt, employers still need to track their hours to rightfully pay them overtime for the times they worked beyond the standard schedule. 

Salaried Employee And Working Hours

Since a salaried employee receives fixed payments regardless of hours worked, there are several confusions regarding the working hours involved. 

How many hours do salary employees work?

It depends on the contract, but the standard full-time hours are 35 to 40 hours per week. However, since a salaried employee’s contract usually stipulates that duties must be accomplished as scheduled, there may be times when they have to work more than the agreed-upon hours. 

What if a salaried employee works less than 40 hours?

If a salaried employee works less than the standard hours, which is usually 35 to 40, they will still be paid their salary. 

Can a salaried employee be forced to work overtime?

It depends on the labour laws. Generally, there is no law to prohibit employers from asking their employees to work overtime. However, salaried employees can refuse, especially if they have already completed their duties and responsibilities. 

Is it legal to work 60 hours a week on a salary?

The labour laws dictate the maximum hours an employee can work per day or week. The Philippine Labour Code, for example, states that employees cannot work more than 8 hours per day and 48 hours per week. Anything beyond that should be compensated proportionately as per the law. In Singapore, the maximum number of hours is 44 (excluding overtime), but no employee should work more than 12 hours a day (unless due to reasons approved by the law). 

How The HR Determines If An Employee Should Be Salaried

Determining whether an employee should be salaried or hourly is an important but challenging task for HR professionals. 

After all, there are several factors to consider. These include:

• The location
• Industry
• Role
• Skillset, years of experience, credentials of employees 
• Supply and demand 

For example, teachers may need to work beyond school hours, so they are usually salaried. Most employees in the Philippines are salaried, while hourly payments are common in the UK and US. Ultimately, employers have to weigh the above mentioned factors against each other to decide whether an employee should be salaried or not.