Salary Law and Legal Definition

Salary is financial compensation an employee receives for performing the job, and part of an employee compensation package. Salary can be on an hourly, daily, weekly, monthly, or yearly basis. Salary may also include overtime pay, bonuses, and commissions. Laws governing payment of minimum wages and overtime may cover salaried employees. The applicability of such laws is determined by the job duties performed and nature of the position, rather than whether wages are paid hourly or on a salary basis.

Salary is a matter of negotiation between an employer and an employee (or employee's representative). However, salaries of public employees are usually defined by statute. There are also various federal and state laws, which vary by state, which prohibit discriminatory practices in salary offers, such as offering lower salaries to employees based on their sex, race or religion.