Base Pay

Base pay is given to employees in exchange for the work performed. The base pay focuses on the position and duties performed rather than on an individual’s contribution. Thus the base pay is usually the same for all employees performing similar duties, and ignores differences across employees. However, differences may exist based on such variables as experience and differential performance. In some countries (e.g., the United States), there is a difference between wage and salary. Salary is base cash compensation received by employees who are exempt from regulations of the Fair Labour Standards Act and, in most cases, cannot receive overtime pay. Employees in most professional and managerial jobs are exempt employees, also called salaried employees. On the other hand, non-exempt employees receive their pay based on an hourly wage.

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