Exempt vs. Non-Exempt Employees

The distinction between exempt and non-exempt employees relates to eligibility for overtime pay under the Fair Labor Standards Act (FLSA).

Exempt Employees are not entitled to receive overtime pay for hours worked over 40 in a workweek. Exempt employees typically have higher-level job duties (such as managerial, professional, or administrative roles) and earn a salary rather than an hourly wage. They must meet specific criteria set by the FLSA, including job duties tests and a minimum salary threshold.

Non-Exempt Employees are eligible for overtime pay when they work more than 40 hours in a workweek. Non-exempt employees are typically paid hourly and must be compensated at a rate of at least one and a half times their regular hourly wage for overtime hours worked. Non-exempt status is determined by job duties and salary level, according to FLSA regulations.

Understanding the difference between exempt and non-exempt employees helps employers ensure compliance with labor laws and avoid potential legal issues related to overtime compensation.