The HR Dictionary

Hourly Employee

An individual is regarded as an hourly employee if they are paid according to the amount of hours they have put in. Hourly workers are paid at a specific hourly rate, as opposed to salaried workers who receive a fixed salary regardless of the number of hours they work, even though there is a minimum expected commitment in most cases. 

In contrast to a fixed pay, hourly employees are widespread in many industries and are frequently seen in service and manufacturing jobs. While at-will work and hourly employment are frequently connected, they are not the same. The minimum wage in the United States is $7.25 as per the Department of Labor. The minimum wage for a tipped employee is $2.13 per hour. The standard minimum wage must be met by the salary and tips of a tipped employee, or the employer is responsible for making up the difference.

Managing such compensation manually if an organization employes different types of employees can be challenging and error-prone. Hence, most organizations utilize the Pay Policy configurations available in Advanced HR software to manage the processing of payroll. Some HR software provides the ability to create custom pay policies tailoured to each business operations in order to make the correct payments to its employees.