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Salaried vs. Hourly Jobs: What You Need To Know
Hcareers / JULY 28 2021
Summary

One of the many benefits of working in the hospitality industry is the versatility that it offers. Hotel types run the gamut, from five-star, luxury hotels to limited-service, all-suite hotels where guests tend to stay for extended periods of time. The people who work in hospitality are also quite diverse as are the types of jobs they do. Likewise, hospitality also offers the opportunity to work for an hourly wage or in a salaried role. 

Hourly Pay

The difference between hourly and salaried jobs in hospitality –and in most industries—comes down to overtime. In an hourly position, you’ll receive overtime pay once you work more than 40 hours in a week. Overtime pay is usually “time and a half.” That is, for every hour you work over 40 hours, you’ll be paid your usual hourly wage plus half of that dollar amount –or 50% more. 

Hourly jobs can have great earning potential. However, overtime may not be an option if you only work part-time. Also, if the number of weekly hours you are scheduled for fluctuates, your pay will also vary. But depending on where you live, state and local laws may require employers to guarantee hourly employees a fixed number of hours each work.

If you’re an hourly worker in a hotel, you will be paid at least the U.S. federal minimum wage of US$7.25 per hour. However, many states and cities have higher minimum wage requirements for employers. So it’s certainly possible to earn more.

Minimum wages for tipped employees are determined by each state.

Salary Pay

Salaried employees received a set dollar amount each pay period that is based on an annual sum. Their pay is consistent with each pay period. Unlike hourly wages, that annual salary number is the result of a negotiation between the employer and employee before the employee is hired. 

Once he or she is hired, they are expected to work as many hours as needed to perform their job. In other words, they will very likely work more than 40 hours per week and not receive any additional pay for those extra hours works. 

Benefits

Historically, hourly jobs have not come with benefits. Now, however, employers are realizing that they need to do more to attract top talent. So some employers may offer hourly employees 401K programs, paid vacation and sick time, and insurance benefits. Although a year of full-time work may be required to become eligible for insurance or any other benefits. 

Conversely, salaried jobs almost always come with a full benefits package. It may take a few months before the employee becomes eligible for all of the benefits included or they may receive complete benefits on day one of work. 

Hourly workers who receive benefits often need to accrue them. So if health insurance is offered, it may only be available to hourly workers who work full-time and have been with the company for a year. Similarly, if paid vacation and sick time are available, employees might earn a percentage of paid time off for hours worked in a single pay period, eventually accumulating full eight-hour days of sick and/or vacation time. 

But it’s the benefits package that is seen as the trade-off by salaried employees. They may not be able to make more money for working longer hours, but they are guaranteed benefits.

Hourly and Salaried Positions

In very general terms, salaried positions in the hospitality industry are often management positions that can range from front desk manager to hotel general manager. 

Hourly jobs in hospitality tend to be frontline workers like housekeepers, front desk associates, bellperson, dishwashers, and restaurant line workers as well as restaurant wait staff

But this is a very broad frame that can vary from hotel to hotel, depending on the hotel’s or restaurant’s size and management structure. It’s possible to find some management jobs in the hospitality industry that are not salaried positions. 

Lifestyle Impact

Salaried positions are often sought-after jobs because the pay is dependable and it comes with benefits. But salaried workers are expected to meet their professional responsibilities regardless of the time it takes. This means they may be responding to emails, getting on conference calls, or attending meetings outside “normal work hours.”

Hourly workers are more susceptible to a company’s financial ups and downs. So when times are good, there may be plenty of overtime available.  However, when a company is in financial turmoil, hourly employees are often on the front lines when it comes to having their hours reduced or worse, getting laid off. 

However, hourly employees also have more work-life balance compared with their salaried counterparts. Since employers must pay hourly workers for any time spent working, they are unlikely to ask them to perform job tasks outside of work hours. Employers are also more discerning when asking hourly workers to stay late as they will have to pay for that additional time.