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Hourly Employee

What is Hourly Employee?

An employee who gets paid for each hour they work is known as an Hourly Employee. Such employee does not get a fixed amount of salary on the pay date, however, they have a defined hourly rate and are entitled to get overtime.

Although many organizations can increase or decrease the hourly rate for a particular employee depending on work or ongoing projects.

How to Calculate the Overtime Amount of an Hourly Employee?

According to the Fair Labor Standards Act (FLSA), the overtime rate is one and one half times the hourly rate which is given to the employee(s) if they work more than 40 hours in a week.

Example:

Rick’s Hourly Salary
=    $10 per Hour
Rick’s Overtime Hourly Salary
=   Rick’s Hourly Salary x 1.5
=   $10 x 1.5
=   $15 per hour

Now whenever Rick works more than 40 hours, he will receive $15 for each extra hour he worked in a week.

Related: Salaried Employee, Federal Minimum Wage, Hourly to Annual Salary, Employee, Employee Type