class Employee{
// salary variable is a private static variable
private static double salary;
// DEPARTMENT is a constant
public static final String DEPARTMENT =
A public variable is accessible everywhere in the code - a private variable is only accessible within the class itself. In this case you're using Employee.salary within the Employee class, so that's fine.
Note that the variable being static is a completely separate matter - and methods and classes have accessibility in the same way as variables.
There are other levels of access available too - protected and the default "package" access (which can't be specified explicitly). See section 6.6 of the Java Language Specification for more details.
(As a side matter, it's also worth learning about what static means - you almost certainly don't want these variables to be statics, as they apply to each Employee rather than the Employee concept in general. It's odd for DEPARTMENT to be a constant here, too.)