New hires: What to know before you pay
By Melissa G. Cassell
Growing up, summertime was primetime for making money – whether in between school years or looking for your first real job. Now, all grown up, you find yourself on the hiring side of the table and you wonder how to negotiate employee compensation.
If hiring for a temporary position, you may assume hourly is the only option. While it is probably the most common, there are other options: you may offer a salary, or better yet, you may be able to spin the position as an internship.
Many people associate salaries with permanency, but there is no rule against paying a salary for a temporary position so long as the salary and time worked do not fall below minimum wage requirements (currently $7.25/hour in South Carolina and North Carolina).
Be careful NOT to assume that overtime is off the table just because you are paying a salary. Overtime pay is required by federal law for hours worked in excess of 40 in a work week for any non-exempt worker and is payable at a rate of not less than one and a half times the worker’s regular rate.
You should also be aware that exempt status (especially for temporary or entry level jobs) is hard to come by. The worker must (a) be paid at least $23,600 per year or $455 per week (which the Department of Labor has recently proposed to increase to $50,440 per year or $970 per week effective as early as Fall 2016), (b) be paid on a salary basis, AND also (c) perform exempt job duties – a very short list of high-level titles and positions promulgated by the U.S. Department of Labor.
Back to that glimpse of hope – might the position you’re offering qualify as an internship, so that wages and salary do not have to be negotiated? If you are a for-profit company, probably not. While there is no bright line test for determining whether a position qualifies as an internship, the intern must receive some personal benefit from the experience to be exempt from employment.
For example, the position should be similar to the type of training received in an educational environment, and the position should not displace (or replace) any regular employees. Additionally, the employer should not derive an immediate advantage from the intern’s activities, or promise a position to the intern at the conclusion of the experience.
In making hiring decisions, compensation can certainly be a large point of negotiation. Be aggressive. Be progressive. But also be submissive to the regulations in place for wage and salary.
Information or interaction on this page should not be construed as establishing a client-attorney relationship or as legal advice. For advice about your specific situation, please consult one of our attorneys.