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Rise Glossary

What is Hourly to Salary?

When an employee moves from being paid on an hourly basis to being paid a salary, it means that they will no longer be paid based on the number of hours worked, but instead will receive a fixed amount of pay each pay period. This transition is generally made when an employee moves from a non-exempt to an exempt status under the Fair Labor Standards Act (FLSA).

Employees who are considered exempt are typically salaried employees who are not entitled to overtime pay and other benefits that non-exempt employees are entitled to. Exempt employees are typically those in management, administrative, professional or some sales positions.

Moving from an hourly to a salary position can be beneficial for employees as it provides a more stable and predictable income, but it can also have downsides such as a loss of overtime pay, and less flexibility in terms of schedule. For employers, it can be beneficial as it can provide more predictability and consistency in terms of labor costs.