What does it mean to be a salaried employee?
Salaried employees are employees that are paid a fixed or set amount of money each year. They may be paid weekly, bi-weekly, or monthly. Salary employees are often referred to as “exempt employees.” For example, their compensation plan may read as ‘$45,000 per year.’
There are upsides and downsides to being a salaried employee and a lot of it have to do with your employer. Some salary employees are forced to work long hours into the evenings and even weekends to complete their work. It is not unusual for a salaried employee to log well over 45 hours per week, and even 10 to 12 hours a day or more during busy periods.
An hourly employee may find this beneficial as it increases their paycheck. However, the salaried employee is bringing home the same amount each week, month, and year according to their agreed salary.
There are of course several benefits to being a salaried employee. They have a consistent dependable paycheck each period which leads to a better sense of security in the position.
The salaried employee has been an important topic of discussion lately as the labor laws governing them are set to change on December 1st 2016. As it currently stands, any salaried employee making $23,660 per year is not awarded overtime in any circumstances, regardless of how many hours they work each day, week, or month.
The threshold will now increase to $47,476 per year. Any employee not making $47,476 annually will be considered non-exempt and qualify for overtime compensation. This law applies to all businesses large and small.
Employers will be faced with two options come December. First, increase your employee's salary to $47,476 or you must begin tracking the time of salary employees and pay overtime to employees working more than 40 hours per week.