What is the term for payment based on the number of hours an employee has worked?

Hourly pay refers to a compensation structure in which employees are paid a fixed rate for each hour they work. This method of payment is common in various industries, especially in roles where hours may vary significantly from week to week. Employees who are paid hourly might track their time to ensure they are compensated for every hour worked, including any overtime they might accrue based on the total hours worked over a standard threshold.

In contrast, salary refers to a fixed amount of compensation paid to employees over a specified period, usually annually, without regard to the number of hours worked. Commission is a pay structure often used in sales, where employees earn a percentage of the sales they generate, rather than compensation based on hours. Piecework compensates employees based on the amount of work produced, not hours worked. Hence, hourly pay is distinctly defined by its basis in the number of hours worked, making it the accurate choice in this context.