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Compensation: Hourly vs. Salary

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Veterinarian reaching into cage
John Wood Photography/The Image Bank/Getty Images

Employers compensate their employees by paying them on either an hourly or salary basis. Hourly employees are paid a set wage for each hour worked, and they are usually eligible for overtime compensation for any hours worked above and beyond the standard 40 hours of each work week. Salaried employees are paid to get the job done, regardless of how many hours of work are required per week in order to complete their core responsibilities.

Exempt vs. Non-exempt Positions

A key factor that figures into any discussion of compensation is whether a position is classified as exempt or non-exempt (i.e. whether or not the employee is eligible for overtime compensation) under the Fair Labor Standards Act (FLSA).

According to the U.S. Department of Labor’s Wage and Hour Division, for an employee to be considered exempt (not eligible for FLSA protections such as minimum wage and overtime), they must pass a variety of “tests” such as being paid on a salary basis of at least $455 per week and working in executive, supervisory, professional, or outside sales positions. These exempt positions require employees to have the ability to independently make significant decisions, the discretion to create and implement company policies, or the responsibility of supervising and managing other employees.

Non-exempt employees are protected by FLSA regulations concerning minimum wage and overtime compensation, and they usually work in non-supervisory roles. They must receive at least minimum wage for each hour worked, with compensation at a rate of 1.5 times the regular pay rate for any overtime hours worked (those in excess of a standard 40 hour work week). Non-exempt employees must keep detailed records of hours worked.

Hourly Pay: Pros & Cons

The main perk of hourly compensation is that employees are guaranteed a specific amount of money for each hour worked, and they receive overtime pay (time-and-a-half) when they work more than 40 hours in a week. In some cases, employers may pay double the normal hourly rate when employees work on holidays. Hourly employees usually have the opportunity to significantly increase their weekly earnings by choosing to work overtime when requested by the employer.

Some companies, however, do not allow their hourly employees to work additional overtime hours and require them to adhere to a 40 hour work week. Hourly employees may also be subjected to varying paychecks if their hours are reduced or on occasions when the business closes early for the day. Also, depending on the company, hourly employees may not have the same access to bonuses, insurance plans, and retirement plans that is enjoyed by salaried employees.

Hourly positions in the animal industry include a variety of options such as horse groom, dog walker, pet retail employee, dog groomer, veterinary technician, lab animal technician, kennel worker, inside sales representative (pet product sales or veterinary pharmaceuticals), and more. Hourly compensation is considered the norm for most non-supervisory or policy-making roles.

Salary Pay: Pros & Cons

Employees that are paid on a salary basis have the security of receiving a steady paycheck with no fluctuations, and they tend to have a higher overall level of compensation than those working a 40 hour week on an hourly pay basis. Salaried employees may also have better access to benefit packages and retirement plan options, larger bonuses, and more paid vacation time than hourly employees.

The key downside to being paid on a salary basis is that (unless the salary position doesn’t meet all requirements to be “exempt” under FLSA) the employee is not eligible for overtime compensation. A salaried employee may have to work 60 hour weeks (or more) to accomplish their required work, without receiving the additional compensation that would be due if they were hourly. Even if the employer doesn’t specifically require the additional hours, the office culture may be such that pressure is applied to those who do not go above and beyond the 40 hour work week.

Positions in the animal industry that are usually paid on a salary basis include veterinarian, zoo curator, veterinary pharmaceutical sales rep (outside sales), pet product sales representative (outside sales), and various managerial and administrative positions.

In Conclusion

Job seekers usually have their own preference when it comes to working for either hourly or salary compensation. While some workers like the security of a receiving a regular paycheck, others prefer to have the chance to either clock out after their regular shift or work additional hours while being compensated at a higher rate.

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