My Friend in HR
Welcome to "My Friend In HR", the podcast where we make Human Resources accessible for everyone! Hosted by Njsane Courtney, a seasoned HR executive, this podcast is perfect for anyone who wants to learn more about workplace policies, practices, and culture.
But this podcast isn't just for HR professionals - it's for anyone who wants to improve their workplace experience and be a better employee. We'll feature interviews with HR leaders, managers, and even regular employees to give you a well-rounded perspective on the world of work.
In each episode, we'll dive into a different HR topic and break it down in a way that's easy to understand, with practical tips and advice that you can apply to your own work life. We'll cover everything from how to handle difficult conversations with your boss or co-workers, to navigating tricky HR policies like vacation time and sick leave.
So whether you're a seasoned HR pro or a newcomer to the field, or even if you're just curious about what HR is all about, join us as we learn and grow together. Let's be friends in HR!
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My Friend in HR
From Hourly to Salary: Promotion or Prank?
Ever wondered if transitioning from an hourly role to a salaried position is the right move for you? We break down the essentials, from the financial implications of overtime pay to the stability of a fixed annual salary. Discover the pros and cons of each employment type and gain practical tips for evaluating your personal circumstances and job benefits. Don’t miss this comprehensive guide to making an informed decision about your career path, packed with insights to help you thrive professionally.
This podcast is for informational and entertainment purposes only and should not be considered formal legal advice. Please note that the policies of your company and laws in your country may vary. Also, the views expressed by the host or his guests do not necessarily reflect the views of any other company or entity.
Speaker 2:Welcome everyone to my Friend in HR podcast, your inside look into the elusive world of human resources and the inner workings of the corporate jungle. I'm your friend, jasani Courtney, and I will serve as your guide as we embark on the journey toward actual career fulfillment. Wow, the summer break has come and gone and during this time, my friend in HR has not been idle. We have been using this break to create a great list of topics to discuss, as well as a lineup of amazing guests and experts that are really eager to share their expertise to help you get the most out of your career journey. I even have a number of entrepreneurs that are excited to share their journey from the corporate jungle to the world of self-employment, so be on the lookout for those episodes over the coming months. In addition, over the last few months, I've received a couple of questions in the my Friend in HR inbox, and before we jump into today's topic, I want to answer a few of them for you right now. David H from the UK writes in.
Speaker 2:Listening to your podcast, I have a new appreciation for the differences in employment law between here in the UK versus the States. What advice would you give to someone who works abroad for a US company. Well, david, the first thing I would say is be ready for a bit of a culture clash. This applies for anyone that works for a company whose headquarters resides out of their home country. One of the biggest differences that I've noticed is the difference in communication styles. Now, keep in mind that this is based on my own experience and opinion. However, when it comes to communication, I personally believe that Brits tend to be much more direct and to the point, while their American counterparts tend to engage in a little bit more small talk and water cooler chatter. Now, this doesn't mean that there isn't common ground for small talk, but this type of chatter definitely varies between the two. Another big difference that I've noticed is the expectations in working hours. Again, in my humble opinion, I believe that Americans tend to be massive workaholics, while folks in the UK definitely have a better sense of work-life balance. Vacation is another area where things tend to be a bit different. In the UK, it's pretty normal for employees to have at least a month's worth of vacation. However, in the United States, there are still jobs that only offer two weeks of vacation per year when you first join that company. I hope that answers your question there.
Speaker 2:David Sharon in Houston writes I'm thinking of quitting my job. What advice can you give me? Well, good news, sharon. Episode seven deals directly with this topic. I recommend that you go back and check out that show, as it addresses a number of factors that you should consider before leaving your current employer. But to give you a few things, I would really need to get to know a little bit more about the situation that has you contemplating leaving your job.
Speaker 2:I would really need to get to know a little bit more about the situation that has you contemplating leaving your job. I mean, do you feel like this is a toxic environment or is the situation where you feel like you've been passed over for promotion? Regardless of what your reasoning may be, my first piece of advice is to never react off of emotion. If you have had a situation recently that has your blood boiling, I suggest you take some time off to cool off so that you can look at your situation objectively. Also, remember that the grass is not always greener on the other side and sometimes the devil that you know is better than the devil that you don't know. I know that sometimes my advice sounds somewhat pro-employer, but many times we allow a couple of bad situations to override our overall perspective of our current employer. As I mentioned in Episode 7, if you're in a toxic area where you're being verbally abused or talked down to, yeah, that's a situation where leaving is probably the best option for the sake of your mental health. But remember, don't put in your two-week notice out of anger or frustration. Run the numbers. Think about the pros and cons of your current job and does your current job provide you with the career fulfillment that you deserve? I would probably ask, sharon, that you email me again with a little bit more detail, because I really want to make sure that I'm helping you address the situation that you're currently facing. And since everyone's situation is just a bit different, the more detail you're willing to share, the more I could probably hone in and help give you an answer that fits your current scenario. Thanks, david and Sharon, for your questions, and if you have a question that you want to email me, feel free to reach out to me at myfriendinhr at gmailcom. And now on to this month's episode.
Speaker 2:This month we're going to dive into the topic of hourly versus salary and, more specifically, hourly versus salary. Is transitioning to a salary role really a promotion. So first let's discuss some of the key differences between hourly and salaried employees, and to do that, we're going to tackle the aspects of hourly employees. Please keep in mind that in many of these situations, this is going to be based off of US standards, although a number of these aspects could be applied to countries outside the United States. So when we talk about an hourly employee, it's just that your pay rate is per hour. So if you make $10 an hour and you work 10 hours, you've earned $100 before taxes and deductions.
Speaker 2:Hourly employees can be considered full-time or part-time, and in many companies you may hear of hourly employees being referred to as non-exempt. Non-exempt means that these workers are not exempt from overtime laws. The rules that govern exempt versus non-exempt Non-exempt means that these workers are not exempt from overtime laws. The rules that govern exempt versus non-exempt are outlined in the Fair Labor Standards Act, which is commonly known as FLSA. Under FLSA, in most states, any time that has been worked beyond 40 hours per week has to be paid time and a half, which is usually 1.5 times their hourly pay. So, going back to that $10 an hour example, if you would normally get paid $10 an hour and you work 40 hours within a week. All hours beyond that point would be at $15 an hour, or 10 times 1.5. Now keep in mind that in some states in the United States overtime laws are somewhat different. For example, some start calculating overtime beyond the eight-hour shift in a given day versus a 40-hour work week.
Speaker 2:As an hourly employee, your time worked is usually closely managed. You have to clock in and record your time on some sort of time card system and in many companies overtime must be pre-approved by management before their work. So what does it mean to be salaried? Well, essentially it means that an employee gets paid a specific fixed amount. So instead of referring to your hourly pay rate in terms of stating your compensation, if you are salaried, you usually state the annual amount. For example, let's say that amount is $60,000 a year, while you could technically say that you make about $28.85 an hour, most salaried employees would just state their annual amount.
Speaker 2:Salaried employees are considered exempt employees, which means under FLSA they are exempt from overtime. So if an exempt employee works 50 hours in a given week, they wouldn't receive overtime pay for that additional 10 hours. So some of you are probably asking why in the world would anyone ever want to be a salaried employee if you aren't eligible for overtime. On the surface it seems like the company can work you as long as they want and not have to pay you any additional money, and on the surface you would actually be correct. But this leads to the crux of the topic.
Speaker 2:For this month I've had a number of friends and colleagues who work hourly roles and after years of loyal service, their manager comes to them and offers them a salaried supervisory role. The individual tends to be really excited until they hear about the new salary. In many cases these lucky folks have been making more than their salaried counterparts when you include their overtime. Yeah, that's right. Some hourly workers actually make more than their managers and supervisors due to the amount of overtime they tend to bring in. In a number of plants and manufacturing facilities it's not uncommon for a number of hourly workers to bring home six figures when you add in their overtime.
Speaker 2:Let me give you an example. So let's say that a supervisor makes $70,000 a year. If that's his or her salary, then that's it. If they work longer hours, they still bring home $70,000. However, let's say one of their employees makes $25 an hour. That means when an employee works overtime, they would typically receive about $37.50 an hour. And let's assume that that employee works about 10 hours of overtime per week and, after all is said and done, that employee will end up making about $1,500 more than their boss. So again, why in the world would anyone want to be salaried versus hourly? It almost seems that this is more of a prank than a promotion.
Speaker 2:However, I implore folks take a bit of a deeper dive before making a rash decision. First, remember that as an hourly employee, yes, if you work those extra hours you will earn more overtime, but remember that the company is not just giving you this money out of the kindness of their heart. You have to put in those hours to make that extra money. The more hours you put in at work, the less time you have for other commitments, such as family and personal activities. So, depending on where you are in your life, working ungodly hours for overtime might be totally worth it. However, if you're married and you have children involved in a number of activities, sometimes the trade-off may not be worth it. I remember one of my mentors telling me that he has never known anyone to get to the end of their days on earth and regretted not working more overtime.
Speaker 2:Another benefit of being a salaried employee is having a consistent paycheck. You always know what your paycheck is going to look like, as there's no overtime to calculate. In many cases, salaried employees tend to be in managerial or supervisory positions, and sometimes that comes with additional perks such as more vacation or eligibility for bonuses and such. So to determine the true value of this new role, you need to take all of that into account, not just your basic paycheck. Another benefit of being a salaried employee is that, although sometimes your days may be longer, the same applies if your days are a bit shorter. So let's say that you have a doctor's appointment at 8 am and you don't show up to the office until 10 am. Guess what? Your salary is still the same. There's no docking of pay. There's no hours to make up. You will still get the exact same salary. Along those same lines, let's say that your child has a piano recital at 4 pm and you need to leave a little bit early just to make sure you arrive on time to get that front row seat to enjoy your prodigy shining moment. Again, there's no docking of pay and your salary is still the same.
Speaker 2:The other thing to keep in mind is that if you want to move up the corporate ladder, typically at some point you will need to transition to a salaried pay structure, as most managerial positions are salaried. Another thing to keep in mind is that overtime is never guaranteed, while your company may have a tradition of always offering overtime, things could change. Production may drop, the industry may take a turn, any number of situations could arise that would cause the company to look at reducing expenses, and typically at the top of that list to reduce is overtime. So, in terms of pay, when trying to decide between hourly and salary, it really comes down to a single question how long do you want to work each week to make a certain level of income? In the example that I've used, I've shown that an hourly employee can make more than their supervisor, but remember, in that example, that employee had to work an additional 10 hours per week, every week throughout the year, which was a total of 520 hours in addition to the 2,080 hours a full-time employee puts in.
Speaker 2:In a previous episode, I talked about the value of opportunity cost and, in case you've forgotten or you hadn't listened to that episode and I don't know why you wouldn't have, opportunity cost is the foregone benefit that would have been obtained from making one choice versus another. So, yes, you would have made another $19,500 per year based on that given example, but you would have given another $19,500 per year based on that given example, but you would have given up the opportunity to go into your daughter's volleyball game or spending time with your partner. Everyone's situation is different and you have to decide what is of greatest value to you at this stage of your career. However, when deciding whether or not to accept that salary position, do not do like most individuals and only look at the lost overtime. For me, at this stage in my career, spending time with my daughter and enjoying a glass of wine on the patio with my wife is worth more than time and a half. Now, to be honest with you, if you would have asked 25-year-old Jasani that same question, I would have looked at you crazy and told you it was all about the Benjamins. Now, keep in mind when I was 25, it was the early 2000s. So, yeah, what I just said would not have sounded so corny.
Speaker 2:Joking aside, definitely consider all of the different perks that you would receive as a salaried employee before making your final choice. The honest truth is is that most people won't give it this level of thought. Most individuals will look at the fact that they're losing overtime and just walk away from what could be the beginning of a major positive turning point in their career. Once more, going back to the example I gave, the hourly employee in question only made $1,500 more than their supervisor, and that is after all of that extra overtime they worked. While your specific situation may have a larger gap, remember that hourly pay is not fixed. Overtime pay can be cut and, if things get bad enough, even your straight time can be reduced. If you only consider the straight time of the annual pay in the example I used, that individual only made $52,000 a year, while their salary supervisor made $70,000. Again, look at what you're being offered in its totality.
Speaker 2:I would also recommend talking to a friend or colleague who is currently on salary. Get their input. Some of their insights might give you more information to make an informed decision. After all, that's what my friend in HR is here to do Give you information and arm you with the data to take control of your career in order for you to achieve your version of career fulfillment. Well, that's going to be all for this month and I hope I've given you a few things to think about when trying to decide between an hourly and salary position.
Speaker 2:In some cases, it'll come straight down to math and the economics of the opportunities. In other cases, it'll come down to where you are in life and do you value more about the flexibility of your career and schedule or the ability to make almost unlimited pay by working additional overtime. Remember, as long as you do what's best for you at this stage of your career, there isn't necessarily a wrong answer. If you want to ask me more questions, you can always send your questions to myfriendinhr at gmailcom. You can also follow me on Instagram under myfriendin underscore HR or on LinkedIn under Jasani Courtney. And remember, guys, that your job is meant to support your life. Your life is not meant to support your job. Until next time, my friends.
Speaker 1:This podcast is for informational and entertainment purposes only and should not be considered formal legal advice. Please note that the policies of your company and laws in your country may vary. Also, the views expressed by the host or his guests do not necessarily reflect the views of any other company or entity.
