What is an Hourly Employee?

An hourly employee is an employee who is compensated for the actual hours worked at a set hourly rate. Employers and employees must document the hours worked and payment is made based on this documentation. Employers must pay hourly employees at least the minimum wage per state or federal laws during each hour worked. If eligible, hourly employees may receive overtime pay for any hour worked beyond 40 hours in a week at a rate of time and a half.

A full-time hourly employee may receive the same benefits as a salaried employee, as per the organization’s offerings. Such allowances may consist of health and life insurance, PTO, retirement plans, etc. It is important to note the definition of full-time employees varies based on the Affordable Care Act (ACA) and the IRS. An employee who works at least 30 hours a week or 130 hours a month is deemed a full-time employee.

For more information on minimum wage for hourly employees please visit the U.S. Department of Labor’s state minimum wage laws page or your state’s labor office.