[Dubravka]

When hiring someone on a pemanent basis (full time) what are the pros and cons of the employer paying the employee salary opposed to wages?

Thank you

[Wondergirl]

From Your Career is in Your Hands - Wages vs. Salary --

Wages vs. Salary

What is the difference between receiving wages and receiving salary as a payment? Wages-salary

Wages is money that a person receives for his/her work or services on the hourly, daily or weekly basis or in parts.

Salary is a fixed compensation paid to a person for work or services on a regular basis.

There is a stereotyped opinion that when you begin to work for the first time in your life, you usually get wages, and when you obtain some experience you can be offered a salary. This is not true. Whether you get salary or wages depends on the company you work for and on the employer who decides what payment you will receive.

What are the advantages and disadvantages of the two types of payment?

Wages
Pros
• You are paid for every hour of your work
• “Overtime” payment for working more than necessary (usually more than 40 hours per week)
Cons
• Certain number of hours of work per week
• Missing working hours (or days) means losing money

Salary
Pros
• A guaranteed fixed amount of money per week/month
• Coping with the work in shorter periods means more free time
Cons
• Incapability to cope with your work in given time obliges you to work evenings or holidays, for which you are not paid extra
• No possibility to earn more than your salary foresees

Summary
There is no right answer what type of payment fits best to what kind of person, that is one should weigh all the positive sides and drawbacks of each of the types and decide for himself/herself what suits him/her better.

It is also helpful to get to know all the relevant information about the position, including details concerning responsibilities, payment and so on.

[CliffARobinson]

First, there are regulations regarding whether you can treat someone as a salaried employee. A salaried employee is not eligible for overtime because they are considered exempt from the Fair Labor Standards Act, (FLSA), which, among other things, requires employees to receive overtime.

For example, simply calling someone a "Manager" does not mean they are Exempt from the FLSA. Incorrectly classifying an Exempt employee will result in paying the OT plus penalties.

Do not make this decision lightly. Check with your state's labor regulations and know what the Federal Requirements are for classification. You will need to consider how much you are paying and what the actual responsibilities of the salaried individual will be.

Here is a great primer from the Houston Chronicle's Small Business Initiative