Learn More About an Exempt and a Non-Exempt Em

Learn More About an Exempt and a Non-Exempt Employee


   By John Wolf

Every workplace has workers that are doing more administrative and managing a job that is called exempt employees and those who do more simple jobs like production or service to the customers that are called non-exempt employees. The significant difference between the types of employees is in the word “exempt” that means exempt of paid overtime.

The employers must follow the regulation about treating the workers as exempt or non-exempt of the pay for overtime.

How Does Overtime Affect Employee Performance?

Exempt Employees

There are a few types of employees, usually classified as “Exempt Employees” that are not entitled to overtime pay as the rules of the  Fair Labor Standards Act (FLSA). There are some differences to FLSA between some states about the hourly rate laws

Note: The FLSA rules require that employers have to pay at list the minimum wage for the necessary 40 hours of work per week. Any hour above will be paid as overtime unless the employee belongs to an exception category.

The Federal Act have some additions in many states that have their own of salary requirements and laws. The employers must obey both Federal and State regulation.

The employees that were considered as exempt are not paid overtime. The employer can offer a benefits package with extra perks to compensate this employee’s extra work.

The exempt employee must be paid a salary (Not hourly) for performing an executive, professional and administrative job.

When you take all the Federal, State and FLSA laws things are becoming more complicated with relation to interns, independent contractors, temporary workers, volunteers, employees that are under training, and foreign workers that employers have to abide the rules this all laws.

Non-Exempt Employees

The Fair Labor Standards Act (FLSA). Rules that a non-exempt employee is entitled to overtime pay. Also, some states have boarder overtime guidelines. You should check with the local state Department of labor website for the updated local rules about exempt and non-exempt employees.

The rule for overtime pay is time and a half of the regular employee’s rate for the weekly 40 hours.

The minimum wage is $7.25 per hour for the 40 hours per week and $ 10.875 per overtime hour.

Types of Exempt Employees

The main categories of exempt workers recognized by the Fair Labor Standards Act (FLSA)

  • Executive

  • Professional

  • Administrative

Those categories are general in purpose to encompass as many types of jobs as possible.

Note: Job title is not alone; this is the tasks to accomplish that defines if the employees status is exempt or non-exempt.

The FLSA rule guarantees the overtime pay to be one and a half of the regular pay rate.

Guidelines for Exemption from Overtime Pay Requirements

These employees can be classified as exempt employees, executive and professional, administrative, and STEM (Science, Technology, Engineering, and Math) They will be eligible to overtime pay if they meet the following criteria:

  • The employees that are on a salary opposed to being paid on an hourly base.

  • Employees make at least a weekly total of $455.

  • Employees on a salary for the week they worked.

To qualify for exemption of overtime workers must meet some employment tests about their job duties and responsibilities.

The Society for Human Resource Management (SHRM) instructs the following conditions must be met for the designation of an employee as an exempt employee.

  • The executive exemption must have a primary duty of managing the enterprise or a department or subdivision of the enterprise; This employee must direct the work of two employees or more and have the power to hire and fire workforce.

  • For the administrative exemption, the employee must have the duty of office and no manual work directly directed to managerial or general business operations of the workplace or the customers. The employee duties must include independent judgment on matters of significance.

  • The professional exemption, employees must have a primary duty of work that requires a high level of knowledge like university degrees in highly specialized areas, such as teaching, computer analytics, and engineering.

Exceptions to Overtime Requirements

Non-exempt with paycheck less then $455 per week must be paid overtime.

With the exemptions are researchers or employees under an educational or governmental grant.

Examples of the Overtime Status of Employees

  • Maria is an exempt employee; she is not entitled to overtime pay.

  • Bob is a non-exempt employee; he works as many overtime hours as it is possible; this way he makes one and a half time his hourly salary.

  • Ruth earns weekly $400 so she is guaranteed to earn overtime for the extra hours she worked at the office.

  • Gaining her promotion and a higher salary, Lidia was no longer a non-exempt employee eligible for overtime pay.

  • John chose the second of two jobs offered him despite the lower salary because he would be able to make more money as he will be eligible for overtime pay.


Part of the US States Have Different Rules for Overtime Pay

Here we can see some examples:

California, to classify an employee of a large employer requires at least a salary of $49,920 or for smaller employers $45,760.

All employees under this level must be paid overtime with no Note that California minimum wage is $12 per hour so overtime will be $18.50

New York has a different salary threshold for New York City or the counties Nassau, and Westchester has a different limit than the rest of New York State.

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Disclaimer: John Wolf and paystubmakr.com are making a total effort to offer accurate, good, ethical HR management, employer, and workplace advice.  We do not use the words of an attorney and the content on the site is not given as legal advice. The website has readers from all US states which all have different laws on these topics. The reader should look for legal advice before taking any action.  The information presented on this website is offered as a general guide only and never as legal advice.

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