An hourly employee is paid a set rate for each hour worked. Most hourly employees are non-exempt under the FLSA, which means they must get at least the minimum wage for every hour and overtime at one and a half times their regular rate after 40 hours in a workweek.
| Hourly | Salaried | |
|---|---|---|
| Pay | Rate x hours worked | Fixed amount per period |
| FLSA status | Almost always non-exempt | Exempt if salary level, salary basis and duties tests are met, otherwise non-exempt |
| Overtime | After 40 hours in a workweek | Only if non-exempt |
| Time records | Required | Hours required only for non-exempt |
See non-exempt employee and salaried non-exempt for the other pay types.
A warehouse picker earns $17 an hour. One week he works 45 hours and earns a $45 productivity bonus. On one shift, his 30-minute meal break was cut to 15 minutes by a truck arrival, and the system recorded it, so those 15 minutes are hours worked and are already in the 45.
To total hours with breaks and overtime, use our time card calculator.
Straight-time pay is 45 x $17 = $765, plus the $45 bonus, for $810. Because the bonus is nondiscretionary, it is part of the regular rate: $810 / 45 = $18 an hour.
The 5 overtime hours earn an extra half of $18, which is 5 x $9 = $45. Total pay for the week is $855. Paying overtime at 1.5 x $17 without the bonus would have given $807.50 plus the $45 bonus, $852.50, an underpayment of $2.50 that adds up across many weeks and employees.
Most pay problems for hourly employees come from small gaps in the time record. Make clocking in and out easy at every location, review missing punches before payroll, record corrections with a reason, and check that breaks were taken as scheduled. Approve time cards before the cutoff, so corrections are paid on time rather than on the next check.
Explain pay clearly too. A new hourly employee should know their rate, their workweek, how overtime and differentials work, how to fix a missed punch and when payday is. Those five points answer most of the questions payroll gets in an employee’s first month.
A retail associate at $16.50 forgets to clock out on Thursday. Her recorded hours show 32, though she worked her full 8-hour shift and 40 hours in the week.
She submits a missed-punch request before payroll closes, the manager confirms with the closing log, and she is paid for 40 hours, $660, on time. Without the request, she would have been short $132 until the next check.
An employee paid a set rate for each hour worked, usually non-exempt and entitled to overtime.
Almost always. Non-exempt employees get one and a half times their regular rate for hours over 40 in a workweek.
Yes. Hourly describes how someone is paid, not how many hours they work.
$7.25 an hour, though many states and cities set higher minimums.
Generally yes, when training is required or related to the job. Time spent in required training counts as hours worked.
Submit a correction request with the actual time, which the manager approves after checking. The record keeps both the original and the change.
Digital HR forms, e-signatures and a digital employee file with expiry reminders, plus announcements by location, department or role.