Different types of employees stand together

What Is a Salaried Employee? Pros & Cons You Should Know

While temporary workers are great for periods of fluctuating demand, salaried employees are meant for consistency and long-term growth. Understanding each type of employee will help you hire the right people at the right time.
In this post, we’ll talk about salaried employees, the pros and cons of hiring them, and how you can schedule them for your business needs.

What is a salaried employee?

A salaried employee is one who receives a fixed amount of pay every week, regardless of how many hours they work.

Most businesses define 40 hours as the fixed hours for salaried employees.

For example: You will have to pay $900 every week if the fixed pay for that employee is $46,800 per year (52 working weeks). The employee receives the same amount even when they work less or more than 40 hours per week.

A salaried employee is quite the opposite of an hourly employee. For hourly workers, how much you have to pay them depends on the number of hours they work each week.

For example: An hourly worker receives $275 if their hourly rate is $11/hour and they work 25 hours that week.

Pros of hiring a salaried employee

Time tracking is simpler

Time tracking can become complicated when unplanned overtime, absences, and tardiness happen. As salaried employees work a fixed number of hours and receive a fixed amount of pay, you don’t have to worry about tracking their work hours every week.

Salaried employees don’t often get paid for overtime hours. But you can offer compensation time to engage them, and this is still simpler than tracking hourly employees.

Payroll is less of a hassle

Similar to time tracking, because salaried employees receive a fixed amount of pay every week, you don’t need to calculate payroll. You simply have to pay them the same amount every time instead of fiddling with pay rates and the total work hours of each staff member.

Employee work hours are more flexible

Most salaried positions don’t require employees to clock in and clock out at an exact time, so these employees often have more flexibility regarding their starting and leaving time. They have more freedom and control over their lives, and they can handle appointments, emergencies, and obligations better.

Cons of hiring a salaried employee

Employees may work less or more than 40 hours

Because you don’t have to track every hour of salaried employees, they’re more likely to work less or more than 40 hours per week. This can either affect your business performance, or employees will feel unfair if they don’t get paid for the extra time they’ve worked.

That’s why it’s important to be clear about a fixed starting and ending time of the workday, as well as focusing on work results rather than the total work hours. 

For example, you set 8:30 am to 4:30 pm as the official work time. As long as employees complete their work efficiently, they can decide to leave earlier or stay longer.

Tracking performance is difficult

For hourly employees, you can look at the hours they work each week to partly evaluate their performance and morale. But you can’t do the same for salaried employees. You can evaluate them based on how they deliver their work and work results instead.

Salaried employees often get benefits

Most salaried employees are offered benefits. Actually, you need to offer benefits to attract qualified and engaging salaried employees. Make sure to control the costs for these benefits so you don’t overspend and affect your bottom line.

Should you schedule salaried employees?

You don’t need to schedule your salaried employees because they work the same amount of hours every week. But you may want to put them in your business shift schedules in these cases: 

  • Your business operates on irregular hours or uncommon work schedules.
  • You want a better overview of both salaried and hourly employees in your schedules.
  • You want to remind your employees of their starting and leaving time.
  • You want to track salaried employees’ attendance.

You can fulfill all of the above needs using Camelo. Create work schedules and shift reminders for salaried employees, as well as tracking their attendance, today.

Similar Posts