What is Exempt vs. Non-Exempt?

Exempt and non-exempt are two classifications of employment status that determine an employee’s eligibility for overtime pay. Essentially, the difference between the two categories is that exempt employees are not legally required to receive overtime pay. 

Exempt Employees

Exempt employees are exempt from overtime pay as defined by the Fair Labor Standards Act (FLSA). They are usually salaried employees and are not compensated based on the number of hours worked. Exempt employees are expected to complete their job duties no matter how many hours it takes, and they do not receive additional pay for working more than 40 hours per week.

Non-Exempt Employees

Non-exempt employees are eligible for overtime pay under the FLSA. They must be paid at least the federal minimum wage rate for all hours worked and receive overtime pay at a rate of one and a half times their regular hourly rate for hours worked over 40 in a workweek. Many states have their own laws regarding minimum wage and overtime pay, so it is important to check the applicable State’s Department of Labor website.

Bottom line: Employers must be aware of the difference between exempt and non-exempt employees to ensure compliance with the FLSA and applicable state laws. By understanding these distinctions, employers can properly classify employees and provide appropriate compensation for their work.