Glossary of Human Resources Management and Employee Benefit Terms
An hourly employee is an employee who is paid for the actual hours they work. Employees are paid a set wage for each hour, and they are generally entitled to overtime pay if applicable. Hourly employees are usually paid time-and-a-half for each hour worked beyond 40 hours per week.
If an individual is paid for the number of hours they’ve worked, they are considered an hourly employee.
While salaried employees are paid a flat wage no matter how many hours they work, hourly employees are compensated at a set hourly rate. Businesses are not required to pay hourly employees for any time they have not worked.
Employers determine the number of hours an hourly employee will work each week, and employees are required to document their work hours in a time card system. This time card is verified and approved by the employer, which then gets sent to payroll.
Hourly employees are paid at a set hourly rate which is multiplied by the hours worked during a pay period. For example, if an employee’s hourly rate is $15 and they worked 20 hours during a pay period, you would multiply $15 by 20 to get a total wage of $300 for their paycheck.
Hourly workers in the U.S. must be paid at least the minimum wage every hour. This minimum wage can be set by federal or state minimum wage laws.
For the list of minimum wages per state, check out the U.S. Department of Labor’s state minimum wage laws page. For further information, you can visit the state labor offices, which provide more information on specific wages for each state.
There is no federal law that requires an hourly employee to work a specific number of hours. But if hourly employees work overtime, they are usually required to receive extra compensation for this time. They are generally paid time-and-a-half for each overtime hour they work.
Though benefit packages vary across organizations, hourly employees who work full-time usually receive the same benefits as salaried employees. This can include health and life insurance, paid time off (PTO), retirement plans, and more.