A salaried employee is a person who gets paid a fixed amount of money (salary) by their employer. Depending on the arrangement in their contract, a salaried employee may receive their pay at any given interval.
Salaried employees get a fixed amount of money no matter how many hours a week they work. This arrangement comes with its pros and cons for both employers and employees.
In the strictest sense of the law, a salaried employee needs to:
- Get paid on a salary basis
- Perform exempt job duties
- Earn at least $455 a week ($23 600 a year)
Weekly Work Hours under a Salaried Payment Structure
In most cases, salaried employees don't have to clock in when they come to work. They usually enjoy a higher degree of trust from their employer than hourly-wage workers. Many salaried employees bring work home or handle tasks during their daily commute. Such a workflow process makes keeping track of their hours more hassle than it is worth.
One of the notable drawbacks of being a salaried employee is the hours you usually have to work. While 40 hours a week is a standard full-time job, most salaried employees work 45-50 hours a week. According to the US Bureau of Labor Statistics, more than 10 million Americans across all industries work over 60 hours a week.
It is up to the employee and the employer to determine the precise duration of their workweek. It is usually governed by workload and performing the job correctly.
The Fair Labor Standards Act (FLSA) doesn't require businesses to pay overtime to salaried employees for weekend work. However, that means if your employer deems it necessary for you to work on weekends to meet a deadline or live up to quality expectations, they can require you to be available.
In theory, a salaried employee may refuse to work overtime. The employer has the right to terminate their employment if they can prove the refusal violates their contractual terms, though. Candidates considering taking a salaried position need to carefully examine and negotiate the terms under which they can refuse to work overtime. In the same fashion, ethical employers need to make provisions for their current and potential employees to allow them to avoid working overtime in some cases.
The FLSA sets up all rules and federal regulations regarding salaried employees. According to the Act, businesses can deduct payments from their employees' checks in several instances.
Sick and Disability Leave
Employers decide the number of paid sick days their workers get. They can deduce money from employees' paychecks who exceed their annual sick leave. The same goes for accrued leave. Accrued leave is the number of days an employee gets off each year.
All absences that aren't the employer's responsibility may result in deductions. These include family needs and emergencies, vacations, and more. While the business has the right to deduct such days from their salaried employees' paychecks, many don't. It is considered an ethical business practice to inform your employees about such possible deductions in advance.
The company has the right to paycheck deductions for violations of set company policies. These may include:
- Ignoring company procedures for work process
- Smoking or taking drugs on company's time and premises
- Mishandling of equipment
In many cases, businesses can invoke disciplinary suspensions for employees' actions unrelated to the work process. The most frequent case is when a worker conducts themselves to violate company ethics or damage its image—the suspension, of course, results in pay deductions.
The Pros of Salaried Positions
Despite potential deductions and unclear rules about overtime and weekend work, salaried employment has a lot of positive sides.
Salaried employees enjoy better financial security. The reason for that is they have a set salary they receive and don't have to worry if they have worked enough hours in any given week. That makes budgeting and planning finances easier.
Salaried employment enjoys more prestige in the work market overall. Some people enjoy the kudos associated with salaried employment. Others are solely in for the perks and benefits. Keeping salaried employees happy is important for companies that value efficiency. Most salaried employees get medical and dental insurance. Many hourly-wage workers don't get paid leave, while salaried employees typically do.
Salaried employees enjoy more flexible work hours as well. Hourly workers have it much harder taking time off for family matters or appointments. Emergencies like getting stuck in traffic usually aren't that big of a problem for salaried employees.
Salaried positions typically exist in professions that allow growth in the company hierarchy. The opportunity for promotion stimulates employees to do better at their job. In this case, both the worker and the business benefit. Last but not least, in most cases, salaried employees earn more. Add company benefits like health insurance, and you will be bringing a much higher net income as a salaried employee.
Performance management is a tool Managers use to align the employees' performance to the company's goals. It aims to tailor an environment where everyone working for the business can do their best.
Employer Net Promoter Score (eNPS)
The acronym eNPS stands for Employer Net Promoter Score. Employers use this scoring system to measure the loyalty and satisfaction of employees within the company. The system uses the NetPromoter Score system as its base. The system comes from Satmetrix Systems Inc, Fred Reichheld, and Bain and Company, and it measures customer loyalty.
HR Business Partner
An HR Business Partner is typically a human resource professional with lots of experience. They generally work directly with the senior leadership of an organization. The goal of an HR Business Partner is to direct and develop a human resource plan that aligns with and supports the organization's goals.
SDI tax is short for State Disability Insurance tax. A few select states have implemented this payroll tax. SDI tax money collected goes into a state fund. This fund is set up to support individuals who can no longer work due to disability, which can be either physical or mental disability unrelated to their profession.