Learn What Is an Exempt Employee

Learn What Is an Exempt Employee


   By John Wolf

An exempt employee is a category of workers on the Fair Labor Standards Act. Those workers do not receive overtime pay, nor qualify for the minimum wage. Exempt employees are not paid for worked hours but for the work they accomplished. An employee can be defined as an exempt worker only if he or she has to use the working time and earn not more than $455 per week.

The employees that have positional duties and responsibilities and a level of authority that includes decision making are those who do not have paid overtime.

The difference between the exempt or nonexempt worker depends on the salaries that they are paid, how they are paid and the character and responsibilities of the king of work they do.

The exempt worker is expected to work the time that needs to accomplish the job and responsibilities of his or her position.

This special conditions of the exempt employee give the employee the liberty to have a flexible schedule and come and go to and from the workplace as it requires to accomplish work. This privilege is not given to nonexempt or hourly employees.

Exclusions from the FLSA Coverage

According to the FLSA, “Particular jobs may be completely excluded from coverage under the FLSA overtime rules. There are two general types of complete exclusion. Some jobs are specifically excluded in the statute itself. For example, employees of movie theaters and many agricultural workers are not governed by the FLSA overtime rules. Another type of exclusion is for jobs which are governed by some other specific federal labor law.

There are rules and criteria to meet for qualifying an exempt employee.

  • Sales out of the workplace: The employee that is a salesperson that visit the clients out of the workplace is qualified to an exemption. Those who work from the base cannot be an exempt employee. Only those employees that leave the building are entitled to be exempted.

  • Managerial Employees: The low management are those who have a small team of more than two teammates under their control and have the hire or fire authority on the team. A manager must have some managerial responsibilities.

  • Managerial Employees: The low management are those who have a small team of more than two teammates under their control and have the hire or fire authority on the team. A manager must have some managerial responsibilities.

Additional Pay for Exempt Employees Policy

                                 Working late as an exempt employee

An example of qualifying or not for exemption :

When the manager spends 60 percent or more of his or her working time in administrative issues. Like employees problems, hiring, firing, other managerial tasks, and the other 40 percent in working near the cash register or attending the clients. This person will be treated as an exempt employee if the salary basis is as the role

The opposite will be the case that the employee is working 90 percent of the working time on the cash register and only 10 percent on the managerial task. This worker will not be an exempt employee.

When the employee pay is based on a salary, it guarantees him a minimum amount of money that is paid for any job done in the pay period.

Learned professionals: If you work as a knowledge-based worker you can be an exempt employee. Accountants, doctors, lawyers teachers, and consultants or any job that is independent are exempt.

  • Administrative professionals: Most of these employees are non-exempt-employee, their duties are related to the day to day administration, not like the marketing or finance jobs that are exempt employees.

  • Minimum salary: Those employees that are paid the minimum wage are exempt of over time. At this moment the minimum salary is $455 a week or $ 23,600 per year. It is expected to rise to $ 50,440 per year.


As an employer, note that the employees that are paid more than $ 100,000 a year are very likely to be an exempt employee.

Exempt employees working late at night

More about Exempt Employees

Exempt employees must receive the same amount on the paycheck every pay period, with no relation to how many hours they worked. They can get bonuses but not any deduction.

If an exempt employee leaves the workplace one hour early you can not deduct this hour from the paycheck but can fire her if you consider, employers can demand the completion of the 40 hours a week, but most will allow the exempt employees flexibility with completing their job. The rule is that exemption is about accomplishing and not about hours worked.

A Simple Guide to Exempt vs Non-Exempt Employees Under the FLSA

It is common to see that many organizations there is one differentiation between full time and part-time employees in the eligibility for benefits such as paid time off (PTO), health insurance, paid vacation and sick leave. Some companies allow part-time.


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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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